The US Treasury has taken a significant step in combating cryptocurrency scams by imposing sanctions on a Philippines-based technology firm and its alleged administrator. Funnull Technology, the targeted company, is accused of providing services to thousands of crypto scam websites, resulting in victim losses exceeding $200 million.
According to the Office of Foreign Assets Control (OFAC), Funnull Technology is linked to most crypto scam websites reported to the FBI. The firm allegedly purchases IP addresses in bulk from cloud service providers and sells them to scammers, allowing them to host and operate clones of legitimate investment platforms. This enables scammers to deceive victims and steal their cryptocurrency.
In one instance, OFAC revealed that Funnell purchased a repository of code used by web developers and altered the code to redirect visitors of legitimate websites to scam websites and online gambling sites. This allows cybercriminals to impersonate trusted brands when creating scam websites and quickly change domain names and IP addresses when legitimate providers attempt to take the websites down.
The accused administrator of Funnull, Liu Lizhi, a Chinese national who managed the firm's employees, has also been added to OFAC's Specially Designated Nationals and Blocked Persons (SDN) list as part of the sanctions. This means that any assets Lizhi has in the US are frozen, and it is illegal for people in the US to conduct financial transactions or have business dealings with him. Violators can face civil and criminal penalties.
OFAC also sanctioned two wallet addresses associated with Funnull, which blockchain analytics firm Chainalysis said were likely used to receive payment from cybercriminals. Additionally, the addresses show indirect exposure to various types of scams and domain management infrastructure vendors.
Chainalysis claimed Funnell is 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, everyone in the US is now forbidden from interacting with all property and business interests where Lizhi and Funnull have a more than 50% stake, with violators possibly facing civil or criminal penalties.
This development highlights the importance of cooperation between governments and private sector companies to combat cryptocurrency scams. It also serves as a warning to those involved in such illicit activities: the US will not hesitate to take action against them.