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Introduction:
In a powerful move against international cyber fraud, the U.S. Treasury Department has sanctioned Funnull Technology, a Philippines-based company, and its alleged operator, Liu Lizhi. Accused of enabling a vast array of crypto investment scams targeting U.S. citizens, Funnull is believed to have facilitated over \$200 million in losses. This action marks a critical effort by U.S. authorities to disrupt the infrastructure supporting so-called “pig butchering” scams, a term used to describe emotionally manipulative fraud tactics. Here’s a detailed look into the network, its modus operandi, and what this means for the future of crypto-related cybercrime.
Massive Crypto Scam Operation Unveiled:
The U.S. Treasury has officially sanctioned Funnull Technology, a company operating out of the Philippines, along with its administrator, Chinese national Liu Lizhi. The organization is accused of building and selling key infrastructure to cybercriminals behind widespread cryptocurrency scams. These scams, commonly known as “pig butchering,” involve scammers pretending to be romantic partners or friends to trick victims into investing in fake crypto platforms.
According to the Treasury and the FBI, Funnull’s services directly enabled the majority of crypto scam websites reported in the United States. Losses have exceeded \$200 million, with average victims losing over \$150,000. The scale of the operation is staggering: investigators uncovered 548 Funnull-linked CNAME records tied to more than 332,000 domain names since January 2025.
Cybercriminals used Funnull’s tools, such as U.S.-sourced IP addresses, hosting services, and web design templates, to build convincing fake investment platforms. These tools allowed scammers to rapidly shift operations between domains, making takedowns more difficult.
Funnull reportedly also bought a repository of legitimate developer code in 2024, which it maliciously altered to redirect users to fraudulent sites and online gambling portals. Some of these destinations are allegedly tied to Chinese money laundering networks.
In response, the U.S. Office of Foreign Assets Control has sanctioned both Funnull and Liu Lizhi, freezing any assets under U.S. jurisdiction and prohibiting Americans from doing business with them. Evidence shows Liu maintained spreadsheets detailing employees’ tasks and domain assignments for various fraudulent schemes.
While this crackdown represents a significant blow to scam infrastructure, experts remain cautious about its long-term effectiveness. Without platforms like Funnull, scammers lose a critical arm of their ecosystem — but given the resilience of cybercrime, more actors may rise to fill the void.
What Undercode Say:
This case is a clear showcase of how modern cybercrime has evolved beyond individual hackers into sophisticated global enterprises. Funnull Technology didn’t just host scam sites — it built a digital infrastructure-as-a-service tailored for criminal use. That’s an alarming evolution. It means we’re not just dealing with isolated scammers anymore, but with well-oiled, scalable tech businesses profiting off illegal activity.
The use of domain generation algorithms and dynamic IP migration shows a high level of automation and technical depth. Funnull essentially offered a criminal cloud solution: cybercriminals could launch and relocate scam operations with ease, staying one step ahead of enforcement. The impersonation of reputable financial platforms using cloned designs made their traps incredibly effective.
Sanctioning Funnull and Liu Lizhi is a strategic move. Cutting off access to the underlying tech infrastructure forces scam rings to find alternative, possibly less effective, methods. However, as with any black market, demand drives innovation. New “Funnulls” could emerge unless global regulation tightens and tech service providers implement stricter vetting processes.
The geopolitical aspect is also important. Liu’s connections to Chinese networks hint at broader criminal collaborations. While the sanctions hit hard financially, enforcing them across borders — especially involving nations with limited legal cooperation — is challenging.
Still, the FBI and Treasury’s transparency in naming the actors and exposing technical details gives cybersecurity experts valuable intel. It allows private sector tech companies to identify and block these infrastructures proactively.
In the long term, more aggressive cyber diplomacy and international agreements will be needed. The digital world is borderless, but law enforcement isn’t. To dismantle such global fraud networks, countries must align their cybercrime definitions and sanctions enforcement mechanisms.
This event also underscores a societal risk: many victims were lured through emotional manipulation. It shows the growing overlap between romance fraud and financial cybercrime. Public awareness campaigns need to highlight not just technical risks, but emotional traps too.
If we draw one lesson from the Funnull case, it’s this — the future of online scams lies not just in shady characters on the dark web, but in legitimate-looking tech providers selling criminal tools to the highest bidder.
Fact Checker Results:
✅ U.S. Treasury officially sanctioned Funnull and Liu Lizhi
✅ Over 332,000 domains linked to scams using Funnull services
✅ FBI confirms over \$200M in U.S. victim losses via crypto scams 🕵️♂️💸🚫
Prediction:
As cybercrime grows more sophisticated, we’re likely to see an increase in takedowns of tech providers rather than individual scammers. This shift in enforcement focus will pressure infrastructure companies to vet clients more thoroughly. However, as long as cybercriminals can pay and operate offshore, replacements for outfits like Funnull will keep popping up — unless global coordination improves. Expect increased sanctions, domain seizures, and perhaps even indictments tied to similar tech enablers in the near future.
References:
Reported By: cyberscoop.com
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