In a significant crackdown on cryptocurrency fraud, the U.S. government has imposed sanctions on Funnull Technology Inc., a Philippines-based company accused of facilitating scams that have defrauded American victims of over $200 million. The allegations highlight an evolving landscape of cybercrime exploiting unsuspecting investors.
Sanctions Targeting Fraud Networks
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the sanctions against Funnull and its Chinese national director, Liu Lizhi. The authorities claim that Funnull has provided key infrastructure for so-called “pig butchering” schemes—frauds where cybercriminals cultivate romantic online relationships to coax victims into investing in fraudulent cryptocurrency ventures.
OFAC has indicated that Funnull is connected to the majority of investment scam websites reported to the FBI. The average individual loss from these scams exceeds $150,000, with actual losses likely being much higher as many victims do not report the crimes.
“Today’s action underscores our commitment to disrupting criminal enterprises like Funnull that enable these cyber scams and rob Americans of their hard-earned savings,” said Treasury Under Secretary Michael Faulkender.
The Role of Digital Infrastructure in Fraud
Funnull’s services reportedly include the wholesale sale of IP addresses and domain generation tools that assist scammers in swiftly deploying new websites. The company also provides website design templates that allow fraudsters to impersonate reputable brands.
These resources enable fraud networks to change domains easily, thereby evading detection. According to the Treasury, “Funnull generates domain names for websites on its IP addresses using domain generation algorithms,” effectively allowing cybercriminals to quickly switch their online identities when legitimate providers attempt to shut down their sites.
“These services not only allow cybercriminals to impersonate trusted brands but also enable them to quickly change domain names and IP addresses when legitimate providers attempt to shut down their websites.”
Allegations have emerged that in 2024, Funnull modified a developer code repository to redirect users from legitimate sites to scam or gambling sites, some of which are purportedly linked to Chinese money laundering networks.
Consequences of the Sanctions
Liu Lizhi has also been sanctioned as the administrator of Funnull. According to the Treasury, Liu managed operational records, including documents tracking employee assignments and domain usage for cryptocurrency fraud, phishing, and online gambling scams.
As a result of the sanctions, all U.S.-based assets or interests associated with Funnull or Liu are frozen. U.S. individuals and entities are barred from engaging in transactions involving the sanctioned parties unless explicitly authorized by OFAC.
The FBI, which has been issuing alerts regarding pig butchering scams, reiterated that Funnull’s operations support thousands of fraudulent websites and continue to pose a risk to American investors.
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