US Sanctions Funnull Technology for Supporting Crypto Scams

The sanctions underscore efforts to combat large-scale cryptocurrency-related fraud, affecting infrastructure but sparing major crypto markets.

Funnull Technology, led by Liu Lizhi, faces sanctions due to its significant role in supporting fraudulent platforms. The firm allegedly acquired bulk IP addresses to host scams, according to U.S. officials. Further, U.S. Treasury Deputy Secretary Michael Faulkender stated the action reflects a commitment to combat cyber frauds effectively.

The sanctions focus on disrupting illicit financial channels by targeting infrastructure rather than fundamental cryptocurrency systems. This includes blocking specific addresses involved in scams while maintaining the overall stability of major cryptocurrencies.

While the sanctions block Funnull and its administrator from U.S. markets, there is no evident impact on major cryptocurrency platforms or DeFi protocols. $200 million in victim losses are linked primarily to scams mimicking legitimate cryptocurrency investment platforms.

Similar historical sanctions, such as those on Tornado Cash, have caused temporary disruptions. Still, they have not significantly altered the broader cryptocurrency ecosystem. The current sanctions aim to solidify legal actions without disturbing market integrity.

Regulatory actions like this one indicate a growing emphasis on combating cybercrime within the cryptocurrency space. The focus is increasingly on infrastructure-level changes and enforcing compliance measures to safeguard markets from illicit activities.