US Treasury Cracks Down on Crypto Scam Enablers
The United States Treasury Department has imposed sanctions on a Philippines-based technology firm, Funnull Technology, and its alleged administrator, Liu Lizhi, for facilitating thousands of cryptocurrency scam websites. According to the Treasury’s Office of Foreign Assets Control (OFAC), Funnull’s services have enabled scammers to deceive victims, resulting in losses exceeding $200 million.
Funnull operates by purchasing IP addresses in bulk from cloud service providers and selling them to scammers. This allows malicious actors to host and operate fraudulent investment platforms that mimic legitimate ones, thereby stealing victims’ cryptocurrency. In one documented instance from 2024, Funnull acquired a code repository used by web developers and modified it to redirect visitors from legitimate websites to scam sites and online gambling platforms.
OFAC emphasized that Funnull’s services not only make it easier for cybercriminals to impersonate trusted brands when creating scam websites but also enable them to quickly change domain names and IP addresses when legitimate providers attempt to take these fraudulent sites down.
Liu Lizhi, a Chinese national who managed Funnull’s employees, was added to OFAC’s Specially Designated Nationals and Blocked Persons (SDN) list as part of the sanctions. Being on this list means that any assets Lizhi has in the US are frozen, and it is illegal for individuals in the US to conduct financial transactions or engage in business dealings with him. Violators may face civil and criminal penalties.
In addition to sanctioning Funnull and Lizhi, OFAC also targeted two cryptocurrency wallet addresses associated with the firm. Blockchain analytics firm Chainalysis identified these wallets as likely being used to receive payments from cybercriminals. Chainalysis noted that these addresses show indirect exposure to various types of scams and domain management infrastructure vendors.
Chainalysis described Funnull as a central player in a network known as the Triad Nexus, which includes over 200,000 unique hostnames associated with investment scams and fake trading apps. As a result of the sanctions, all individuals in the US are now prohibited from interacting with any property and business interests in which Lizhi and Funnull have a more than 50% stake. Violators may face civil or criminal penalties.
The sanctions highlight the ongoing efforts by US authorities to combat cryptocurrency-related scams and the infrastructure that supports them.
