A California crypto fraud case ended with a high-profile cryptocurrency scam sentencing after prosecutors secured a 51-month prison term for Shengsheng He. The ruling follows guilty pleas from eight co-conspirators in the Axis Digital Limited scheme. Court documents say nearly $37 million was laundered through shell companies and overseas accounts, converted to USDT (Tether), and moved across wallets to hide the trail. The DOJ crackdown on crypto fraud frames this as part of a wider effort to stop pig-butchering scams.
California crypto scam
This cryptocurrency scam sentencing centers on Shengsheng He, who was convicted of running an unlicensed money transmitting business. Victims were contacted with unsolicited messages and dating-app conversations. Scammers used deceptive communications to build trust and then directed victims to send funds. The sentencing highlights how modern scams combine social engineering with layered financial obfuscation.
Axis Digital Limited
Investigators traced transfers through Axis Digital Limited, a Bahamas-based entity that helped convert stolen cash to stablecoins. Axis Digital Limited accounts received funds that were then swapped to USDT (Tether) for quick international movement. Plea deals and asset seizures followed, and eight co-conspirators admitted guilt alongside He in recent filings.
Shell companies and USDT
Scammers relied on shell companies and overseas accounts to break the money trail and frustrate investigators. Converting to USDT (Tether) allowed near-instant transfers between exchanges and private wallets. Prosecutors described the operation as an unlicensed money transmitting business, which carries federal penalties when used to launder stolen proceeds.
DOJ crackdown on crypto fraud
The Department of Justice labeled the case an example of its broader DOJ crackdown on crypto fraud. Officials emphasized restitution and deterrence. Courts ordered restitution of $26.9 million for victims while sentencing He to 51 months. The move signals tougher enforcement against groups behind pig-butchering scams and cross-border laundering.
Recovering funds and restitution
Victims in the California crypto scam will seek restitution, though full recovery is often difficult. Asset seizures and plea agreements aim to return some funds. The restitution of $26.9 million is a start, but tracing converted stablecoins and overseas accounts remains complex.
Frequently asked questions about cryptocurrency scam sentencing (FAQ)
What triggered this cryptocurrency scam sentencing?
Prosecutors proved that Shengsheng He laundered nearly $37 million using Axis Digital Limited and USDT, operating an unlicensed money transmitting business.
How does the DOJ crackdown on crypto fraud affect investors?
The DOJ crackdown on crypto fraud increases enforcement and may improve recovery, but investors still need vigilance against pig-butchering scams and unsolicited contacts.
Will victims get all their money back after this cryptocurrency scam sentencing?
Courts ordered restitution of $26.9 million, but full recovery is rare. Asset seizures and cooperation with foreign authorities can help.
How were shell companies and overseas accounts used?
Scammers routed funds through shell companies and overseas accounts to obscure ownership, then converted proceeds to USDT for fast transfers.
BlockAI reporting for defidonkey.com — delivering concise coverage of the California crypto scam and related enforcement developments.
