Regulatory authorities have confronted the growing threat of digital scams by sanctioning Philippines-based Funnull Technology and its administrator Liu Lizhi. This latest action addresses allegations that Funnull supplied the infrastructure for extensive cryptocurrency investment fraud, targeting primarily U.S.-based individuals. Industry observers note that digital scams increasingly exploit the infrastructure of legitimate companies, making detection and prevention more complex for both authorities and potential victims. As criminals adapt to tighter regulations, the challenge continues to shift, drawing concern over the efficacy of sanctions as a standalone response.
Previous incidents involving cryptocurrency fraud largely focused on individual schemes and phishing attacks, but involvement of infrastructure providers on this scale was rarely made public. Most earlier sanctions targeted wallets or exchange platforms suspected of laundering proceeds, rather than entities providing hosting or domain services. The emphasis has gradually moved from financial assets to internet infrastructure, underlining a change in focus by law enforcement as scams utilize more sophisticated networks.
How Did Funnull Technology Facilitate Crypto Scams?
Funnull Technology is accused of assisting the majority of cryptocurrency investment scam sites reported to the U.S. Federal Bureau of Investigation, resulting in losses exceeding $200 million among U.S. victims. The Treasury Department asserted that Funnull supplied internet infrastructure and technical tools, enabling cybercriminals to create convincing, fraudulent investment sites. Average losses per victim reportedly surpassed $150,000, reflecting the substantial personal and financial harm inflicted on those affected. Perpetrators commonly impersonated trustworthy acquaintances or romantic interests to lure victims into these fraudulent schemes, creating an ecosystem difficult for individuals to recognize and avoid.
What Specific Methods Did Funnull Use?
Authorities explained that Funnull acquired internet resources like IP addresses, hosting services, and domain names from legitimate providers in the United States, reselling them to scam operators. According to law enforcement, the company utilized domain generation algorithms to develop site names imitating reputable brands and, along with web design templates, enabled fraudulent actors to repeatedly shift operations between sites and addresses. Notably, over 332,000 unique domains were linked to Funnull since January 2025, indicating the scale of the operation. Security specialists highlighted that this represented a volume well beyond typical digital scam infrastructure, making mitigation efforts more challenging.
Who is Behind the Operation?
The investigation identified Liu Lizhi, a Chinese national, as a key figure in orchestrating Funnull’s activities, supporting the setup and maintenance of domains for cybercriminal use. Documentation in Liu’s possession allegedly detailed employee involvement in domain name assignments for scams, phishing, and gambling sites. Funnull also reportedly altered web developer code, redirecting users seeking legitimate sites toward fraudulent or gambling destinations, some allegedly associated with Chinese money laundering groups. Officials believe these actions increased the effectiveness and resilience of fraudulent platforms, complicating both prevention and enforcement efforts.
“Today’s action underscores our focus on disrupting the criminal enterprises, like Funnull, that enable these cyber scams and deprive Americans of their hard-earned savings,” said Michael Faulkender, deputy secretary of the Treasury Department.
The Office of Foreign Assets Control imposed sanctions on both Funnull Technology and Liu Lizhi, marking a coordinated move to block access to U.S. financial systems and business networks for those named. Industry analysts expressed cautious optimism regarding the disruption, while noting that further actions may be needed to address the wider ecosystem supporting such scams beyond just service providers.
Targeting the underlying infrastructure suppliers such as Funnull Technology demonstrates a shift in regulatory and enforcement strategies, focusing more on the “enablers” behind mass digital fraud. Effective response against these operations requires collaboration between regulatory bodies, law enforcement, and the private sector, emphasizing the shared role of technology providers in threat mitigation. For individuals, awareness remains essential, as scammers increasingly refine their tactics and leverage seemingly legitimate online environments. Industry and government sanctions like these may disrupt operations, but systemic controls, public education, and robust monitoring remain crucial as criminals evolve their approaches to exploit new vulnerabilities in the digital financial landscape.
