US Sanctions Philippine Tech Firm Tied to Global Crypto Scams
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Funnull Technology Inc., a tech firm based in the Philippines, and its administrator Liu Luzhi. The sanctions were imposed due to their alleged role in supplying backend infrastructure for a network of fraudulent cryptocurrency investment websites.
According to the U.S. Treasury, Funnull played a crucial role in enabling virtual currency investment scams, commonly known as ‘pig butchering’ scams. The company allegedly purchased large quantities of IP addresses from major cloud service providers worldwide and sold them to cybercriminals. These IP addresses were then used to host fraudulent investment platforms and other harmful online content.
The Treasury reported that American victims lose billions of dollars annually to cyber scams, with 2024 marking a record high in illicit revenue from these schemes. Funnull directly supported several of these operations, contributing to more than $200 million in reported losses from U.S. victims.
Funnull is alleged to have used domain generation algorithms (DGAs) to create domain names for websites hosted on the IP addresses it purchased. These algorithms produce large volumes of similar but distinct website names. Additionally, the tech firm reportedly supplied web design templates to cybercriminals, allowing them to mimic trusted brands and rapidly shift to new domains and IP addresses once legitimate providers become aware of the fraudulent activity.
Liu Luzhi, a Chinese national and Funnull’s administrator, was reportedly involved in the operation and had access to internal documents. These documents included spreadsheets detailing Funnull’s staff, their performance metrics, and task progress. Among these tasks was assigning domain names to cybercriminal groups, some of which were linked to virtual currency investment fraud, phishing schemes, and illicit online gambling platforms.
Following the sanctions, all individuals and entities in the United States are prohibited from engaging with any property or business interests in which Liu Luzhi and Funnull hold more than a 50 percent ownership. Violations of these restrictions may result in civil or criminal penalties. Liu Luzhi has been placed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) list as part of the enforcement actions.
The U.S. Treasury’s action against Funnull highlights the ongoing efforts to combat cryptocurrency-related scams and fraud. Investors are advised to remain cautious and conduct thorough research before engaging in any cryptocurrency investments.
