US sanctions Phl-based company over alleged investment scam involvement

The United States has imposed sanctions on a Philippine-based company allegedly serving a major role in virtual currency investment scams targeting Americans.

In a statement on Thursday (US time), US State Department spokesperson Tammy Bruce said Funnull Technology Inc. is allegedly providing the critical computer infrastructure for the fraudulent scheme that has victimized US citizens.

Bruce said Funnull Technology Inc., along with its Chinese national administrator Liu Lizhi, have caused Americans to lose billions of dollars annually to these cyber scams, with revenues generated from these crimes rising to record levels in 2024. 

“Today’s targets are directly connected to over $200 million in losses reported by US victims, with an average cost of over $150,000 per individual,” Bruce said. 

In a separate statement, the US Department of the Treasury said “all property and interests in property of the designated or blocked persons described above that are in the US or in the possession or control of US persons are blocked and must be reported to Office of Foreign Assets Control (OFAC).”

“In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked,” it said. 

“Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by US persons or within (or transiting) the United States that involve any property or interests in property of blocked persons,” it added.

The sanctions also stated that financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities involving designated or otherwise blocked persons.

“The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person,” it said.

‘Pig butchering'

According to the US Treasury department, the Philippine-based tech company “enables virtual currency investment scams by purchasing IP addresses in bulk from major cloud services companies worldwide and selling them to cybercriminals to host scam platforms and other malicious web content.”

“Funnull is linked to the majority of virtual currency investment scam websites reported to the FBI.  US-based victims of these scam websites have reported over $200 million in losses, with average losses of over $150,000 per individual,” it said.

The department noted that these figures likely underestimate the total losses, as many victims of scams do not report the crime.

The fraudulent scheme, also known as pig butchering, is believed to be largely perpetrated by criminal organizations based in Southeast Asia who use victims of labor trafficking to conduct outreach to millions of unsuspecting individuals around the world.

The scammers leverage fictitious identities, the guise of potential relationships, and elaborate storylines to deceive victims into believing they are in trusted relationships. 

Once trust is given, the scammers then steal victims’ assets by convincing them to invest in virtual currency through a fake website designed to look like a legitimate investment platform that reflects significant, but fabricated, returns on the investment. 

However, once a victim is unable or unwilling to pay more into the scam, the scammer will abruptly cease communication, taking the victim’s entire investment with them.