A $37 million USDT money laundering case has been cracked. In the era of crypto compliance, how can investors protect themselves?

U.S. Central District Federal Court Judge R. Gary Klausner issued a ruling this Tuesday, sentencing 45-year-old Chinese national Su Jingliang to nearly four years of federal imprisonment for participating in the laundering of approximately $37 million in cryptocurrency scam funds, and ordering him to pay over $26 million in restitution. Behind this case is a carefully orchestrated transnational crime network. The gang contacted U.S. victims via SMS, phone calls, and online dating platforms, luring them into false crypto investments.

Case Overview

This high-profile crypto money laundering case centers on 45-year-old Chinese national Su Jingliang. He was sentenced to 46 months in federal prison and ordered to pay over $26 million in restitution for laundering nearly $37 million in illegal digital assets. The case involves a tightly organized transnational crime network that specifically targeted U.S. victims through various communication channels to carry out scams.

Prosecutors stated that Su Jingliang was a key member of the criminal network, with accomplices reaching potential victims via SMS, phone calls, and online dating platforms to entice them into fake cryptocurrency investment schemes.

Method Analysis

This criminal network employed a meticulously designed double-fraud strategy. They first created counterfeit websites mimicking legitimate cryptocurrency trading platforms, with appearances nearly indistinguishable from real platforms. After victims were directed to these fake sites, the criminals would present false investment return reports, creating the illusion that investments were continuously profitable.

In the money flow stage, the network built complex money laundering channels. Illegal proceeds first flowed through shell companies in the U.S., digital asset wallets, and international bank accounts, forming multi-layered transfer pathways.

Fund Pathways

The money laundering network’s pathways are extremely complex and international. Investigations revealed that approximately $36.9 million in scam funds were ultimately transferred into an account at Deltec Bank in the Bahamas, where they were exchanged for USDT. After the exchange, accomplices in Cambodia transferred these USDT to the masterminds behind regional scam centers. The entire transfer process leveraged the cross-border nature of cryptocurrency circulation.

The U.S. government confirmed at least 174 U.S. victims during the investigation. Su Jingliang previously pleaded guilty in June 2025, admitting to a charge of “conspiracy to operate an illegal remittance business.”

Regulatory Trends

This case’s verdict comes at a time of tightening global crypto regulations. On January 11, 2026, Tether executed a large-scale freezing operation on the Tron network, locking assets exceeding $182 million.

Chainalysis data shows that by the end of 2025, stablecoins accounted for an astonishing 84% of all illegal cryptocurrency transaction volume. This trend explains why regulators and stablecoin issuers are increasingly focused on illicit fund flows. From 2023 to 2025, Tether froze approximately $3.3 billion in assets across over 7,200 addresses.

USDT Market and Price Trends

As the largest stablecoin by market cap, USDT plays a crucial role in the cryptocurrency market. Industry data indicates that Tether’s market cap accounts for about 60% of the entire stablecoin market, giving it significant influence over global digital asset liquidity. Notably, stablecoins are essentially “programmable bank accounts,” with issuers retaining the technical ability to freeze funds under certain conditions. This feature is a powerful tool in combating illegal activities but also sparks discussions about the decentralized nature of cryptocurrencies.

On major trading platforms like Gate, USDT is typically used as the base currency for trading pairs, providing market liquidity. Its price stability makes it an important bridge connecting traditional finance and the crypto world.

Investor Protection Guidelines

In the face of increasingly sophisticated crypto scams, investors need to adopt multiple protective measures. First, be cautious of unverified investment platforms, especially those promoted through informal channels.

When choosing trading platforms, prioritize compliant exchanges like Gate that implement strict KYC (Know Your Customer) and AML (Anti-Money Laundering) policies. These platforms usually have better security measures and user protection mechanisms. Additionally, investors should be wary of crypto investment opportunities promoted via social media, dating platforms, or cold calls, especially those promising high returns. Before investing, conduct independent research on the project background and verify the platform’s authenticity.

The tightening regulatory environment signifies increased protection for investors. The 2026 crypto regulation trend shows that major jurisdictions worldwide are strengthening oversight of digital asset trading platforms, requiring them to establish comprehensive compliance systems and customer protection measures.

The fake trading websites involved in the case closely resembled real platforms, but their domain names often contained subtle misspellings or used unconventional top-level domains. A victim recalled, “I thought I was operating on a legitimate platform until I tried to withdraw and realized all contact methods had become invalid.” The laundering center in Cambodia, after receiving USDT, would split and transfer funds through multiple intermediary wallets, ultimately moving into untraceable mixing services. This method makes it difficult for law enforcement to trace the final destination of funds. After the verdict, U.S. Assistant U.S. Attorney Bill Essayli stated, “New investment opportunities may sound enticing, but they have a dark side—they attract criminals to steal and launder tens of millions of dollars.” This remark highlights the coexistence of innovation and risk in the digital asset space.