The FBI seized 127,271 BTC — valued at approximately $8 billion at confiscation and up to $15 billion at peak market prices — in what the Department of Justice is calling the largest forfeiture action in U.S. government history. The operation, designated Operation Blackout, dismantled an intercon...
"Scam compounds are not just call centers. They are organized criminal enterprises built to steal from Americans, launder money, and exploit people at scale." — Kash Patel, FBI Director
The FBI seized 127,271 BTC — valued at approximately $8 billion at confiscation and up to $15 billion at peak market prices — in what the Department of Justice is calling the largest forfeiture action in U.S. government history. The operation, designated Operation Blackout, dismantled an intercontinental network of crypto-investment fraud compounds spanning Cambodia, Myanmar, Thailand, and the United Arab Emirates. Central figure Chen Zhi, 37, founder and chairman of Cambodian conglomerate Prince Holding Group, faces federal charges of wire fraud and money laundering conspiracy carrying a maximum 40-year sentence.
The operation freed nearly 2,000 trafficking victims forced to work inside fortified compound facilities, arrested approximately 300 suspects across multiple countries, and severed financial infrastructure that the FBI estimates processed more than $8 billion in fraudulent proceeds. The seizure represents a material escalation in law enforcement's capacity to trace, freeze, and recover illicitly obtained cryptocurrency at scale.
Operation Blackout is an umbrella designation encompassing at least four distinct FBI investigations that converged on a single target: the transnational scam-compound industry. The four sub-operations were:
The coordinated sweep involved the Department of Justice, the U.S. Treasury's Office of Foreign Assets Control (OFAC), the Financial Crimes Enforcement Network (FinCEN), the U.S. Secret Service, Homeland Security Investigations, and the U.K. Foreign, Commonwealth & Development Office.
In parallel, OFAC imposed sanctions against 146 entities associated with Prince Group, and FinCEN issued a Section 311 special measures order against Huione Group, effectively severing the organization from the U.S. dollar clearing system.
Chen Zhi, also known as Vincent, operated Prince Holding Group as both a legitimate Cambodian conglomerate and an alleged front for crypto-investment fraud at industrial scale. According to the DOJ indictment unsealed in Brooklyn federal court in October 2025, the network was generating an estimated $30 million per day in fraudulent crypto-investment proceeds as early as 2018.
The scheme operated through "pig butchering" — a social engineering method in which victims are cultivated via social media and messaging apps, led to believe they are making profitable cryptocurrency investments, and systematically drained of funds. Cyber Scam Monitor has documented over 200 scamming centers in Cambodia alone.
Chen held diplomatic credentials issued in 2020 and served as a personal adviser to Cambodian Prime Minister Hun Manet. He traveled to the United States in April 2023 despite the ongoing investigation. According to TRM Labs, corruption payments included a $3 million yacht purchase for a senior government official and luxury watch purchases valued in the millions for other officials in exchange for raid warnings and operational protection.
Between 2021 and 2022, a network dubbed the "Brooklyn Network" transferred more than $18 million from U.S. victims to Prince Group accounts in Cambodia, according to TRM Labs' blockchain forensic analysis. Coordination with China's Ministry of Public Security and Ministry of State Security allegedly provided additional layers of protection via "risk control" teams that managed official relations.
Chen remains at large. If convicted, he faces a maximum sentence of 40 years in prison.
The cryptocurrency seizure — 127,271 BTC — originated from activity historically referred to in blockchain forensics as the "Lubian Hack" of December 2020. According to TRM Labs, the majority of funds consolidated into a single cluster holding approximately $14.13 billion in Bitcoin, with remaining funds routed through intermediary hops to other unhosted wallets and global exchanges.
Chen personally held seed phrases for several of the 25 unhosted wallets controlled by himself and top lieutenants. The funds remained largely dormant from December 2020 until renewed activity appeared in June-July 2024, coinciding with DOJ seizure operations.
The forensic trail extended across laundering infrastructure in Singapore, Hong Kong, Palau, the Cayman Islands, the British Virgin Islands, and the United States. TRM Labs' analysis utilized its Beacon Network and Graph Visualizer tools to map the flow of funds across these jurisdictions.
The scale of the seizure — roughly 0.6% of Bitcoin's total circulating supply — raises questions about the disposition of forfeited assets. The U.S. Marshals Service typically liquidates seized cryptocurrency through auction, though no timeline has been announced for these holdings.
The physical infrastructure underlying the fraud operation consisted of fortified compounds with dormitories enclosed by high walls and barbed wire. Hundreds of people — many recruited through false job advertisements — were trafficked into these facilities and forced to execute fraud scripts targeting U.S. and global victims.
Operation Blackout freed nearly 2,000 trafficking victims across Southeast Asia. In Myanmar, more than 7,000 Starlink internet terminals used by compound operators for communications and coordination were suspended after Starlink used law enforcement data to identify the installations.
The compound model represents a convergence of organized crime, human trafficking, and cryptocurrency fraud that has grown substantially since 2020. Dubai-based compounds each generated approximately $6 million in annual fraud proceeds, according to FBI estimates.
The geographic scope of Operation Blackout extended across at least six countries:
| Country | Action | Scale | |---------|--------|-------| | Cambodia | Prince Holding Group dismantled, 200+ scam centers documented | 146 entities sanctioned | | UAE | Operation Sand Dollar arrests | 275 arrested, 6 face extradition | | Myanmar | Tai Chang compound (Kyaukhat) targeted | 7,000+ Starlink terminals suspended | | Thailand | Shunda Compound Takedown | Equipment seized | | United States | Federal indictment, forfeiture proceedings | 127,271 BTC seized | | United Kingdom | Coordinated sanctions | FCDO coordination |
In addition to the criminal enforcement actions, the FBI's proactive victim notification program, Operation Level Up, has notified 8,935 victims of cryptocurrency investment fraud as of March 2026, 77% of whom were unaware they were being scammed. The program has prevented an estimated $562 million in further losses.
The FBI's Internet Crime Complaint Center (IC3) received approximately 72,000 cryptocurrency investment fraud complaints in 2025, reporting total losses of $7.5 billion in that category alone. Total cryptocurrency-related fraud losses across all categories reached $11.37 billion in 2025, a 22% increase over 2024. Victims aged 60 and older accounted for $4.35 billion — roughly 38% — of those losses.
Pig butchering specifically accounted for $7.2 billion in reported losses in 2025, a 24% year-over-year increase according to IC3 data. Annual global crypto fraud inflows are estimated at $17 billion.
The 2026 enforcement trajectory has already surpassed the previous decade's combined efforts in the first four months of the year, according to reporting from CryptoTimes. The DOJ launched two historic operations by April 29, complementing the Dubai Police arrest sweep.
Operation Blackout demonstrates that the infrastructure supporting crypto-investment fraud has evolved from isolated phone operations to a multi-billion-dollar, multi-continent industrial complex involving state-level corruption, human trafficking, and sophisticated blockchain laundering networks. The $8 billion seizure is materially significant, but it represents a fraction of the estimated $17 billion in annual crypto fraud inflows globally.
The operation also validates the maturation of blockchain forensic capabilities. The ability to trace 127,271 BTC across six jurisdictions, map them to 25 wallets, and execute seizure across multiple legal systems marks a notable advance in cross-border enforcement coordination. Whether this enforcement capacity can scale to match the $11.4 billion annual fraud loss rate documented by IC3 remains an open question. The forfeited Bitcoin itself presents a secondary challenge: its liquidation timeline and method will be watched closely by market participants given its scale relative to daily trading volumes.