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Connecting Chinese and American Scam Victims

Reiter, Jonathan ; Team, Bitrace (2024) — SSRN Electronic Journal

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DOI: 10.2139/ssrn.4687064 (opens in a new tab)

Type:   Journal Article
Country:   Global
Tags:   Blockchain Tracing, China, Cross Border, Cross Border Scams, Cryptocurrency, Cryptocurrency Exchanges, Exchanges, Forensic Analysis, Forensic Case Analysis, Forensic Research, Money Laundering, On Chain Analysis, Pig Butchering, Romance Scams, United States
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Synopsis

            
This study uses on-chain tracing and documentary evidence to follow cryptocurrency from identified scam-entry wallets through laundering services and into exchanges. Flow analysis connects victim cases in Florida, California, and China through shared intermediaries and service providers, showing infrastructure that crosses national and scheme boundaries. The documented U.S. cases include a fraudulent investment dashboard and a romance-led fake cryptocurrency application, while the Chinese material includes other wallet and investment frauds. The contribution is therefore a map of common financial infrastructure, not a cross-cultural comparison of victims' narratives or recovery. Only some wallet inflows are proven scam proceeds, exchange totals can over- or under-attribute activity, transaction cycling can double-count funds, and the available cases cannot identify every related operation.

          

        
                  

            
Identified Gaps

            
Identified gaps include a limited set of four documented cases and lack of comparable court data for all China cases, restricting generalization. Reliance on victim reports, civil-forfeiture orders, and media sources may introduce bias. The analysis acknowledges possible undercounting and non-exhaustive mapping of networks, with no definitive census of scams or laundering pathways beyond the studied wallets and service providers.

          

        
                  

            
Methods

            
The study uses on-chain tracing of scam-entry wallets through money-laundering services to exchanges, supported by documentary evidence (civil orders, press reports) and an appendix of wallet addresses. It connects Florida, California, and Chinese cases via shared intermediaries and exchanges, employing flow diagrams to illustrate cross-border linkages and the scale of operations.

          

        
                  

            
Limitations

            
Limitations include: only a subset of inflows to scam-entry wallets is proven as scam proceeds; exchange-deposits total may over- or under-attribute to scams; potential double-counting due to cycling of transactions; China cases lack comparable court documentation; findings are not exhaustive and rely on available records, limiting generalization.

          

        
                  

            
Future Work

            
Future work should expand the dataset to include more cross-border cases, multiple jurisdictions, and longer time horizons to better quantify scale. It should seek more complete court records and corroborating evidence from exchanges and service providers, develop standardized on-chain attribution methods, and foster international law-enforcement collaboration to improve detection, prosecution, and disruption of pig-butchering networks involved with cryptocurrency.

          

              

    
    

        
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