The Commodity Futures Trading Commission has charged digital asset platform Debiex with fraud after it said it used a romance scam tactic known as “pig butchering” to swindle investors out of $2.3 million.
The CFTC said Debiex and Zhāng Céng Yáng may have acted as so-called “money mules” for the platform. The complaint was filed this week in U.S. District Court in Arizona.
Unidentified people associated with Debiex “established friendly or romantic relationships with potential customers” by lying to gain their trust and then asked Debiex to open and fund trading accounts, the CFTC said. name On Friday.
The lawyers involved had knowledge that could lead to large profits in cryptocurrency assets such as Bitcoin and Ethereum, the CFTC said in the accompanying complaint.
Regulators said Debiex misappropriated about $2.3 million from five customers as part of the scheme. The agency is seeking compensation, clawbacks, monetary penalties, a trading ban and a permanent injunction against the customers involved.
“This case exemplifies the Department’s core mission of delivering justice for victims, rooting out misconduct, and holding accountable those who violate the CEA’s anti-fraud provisions,” CFTC Enforcement Director Ian McGinley said in a statement. He said.
The CFTC said Debeix specifically targeted Asian Americans in the scheme, luring customers by contacting them through U.S.-based social media platforms and then encouraging them to open and fund trading accounts.
Debiex said that instead of using funds on behalf of its customers, Debiex misappropriated its customers’ digital assets.
“Unbeknownst to customers, the Debiex website simply mimicked the functionality of a legitimate live trading platform and the website’s ‘trading accounts’ were a complete ruse,” the CFTC said. “No actual transaction took place on behalf of the customer.”
CFTC’s second pig slaughter incident
CFTC Commissioner Kristin Johnson noted Friday’s incident was the agency’s second hog slaughter in the past few months.
“As the graphic name suggests, these schemes liken the practice of soliciting consumers to participate in fraudulent investment opportunities to ‘fattening’ unsuspecting pigs before slaughter,” Johnson said. name.
The CFTC is the first to bring a similar case. June Relates to digital asset products and foreign exchange companies.
“In this case, the fraudsters used a shared native language and other similar evidence of shared identity to establish trust. They later exploited these intimate relationships,” Johnson said. “I strongly encourage all members of the public to visit our Investor Advisory page to stay informed about fraud and abuse that may be occurring in the digital asset markets.”
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