BingX Insights

Get the latest blockchain news on BingX.

US DOJ Confiscates $112 Million Worth of Crypto Linked to ‘Pig Butchering’ Scams

AA News - Dimitar Dzhondzhorov 2023-04-09 14:15

The United States Department of Justice (DOJ) seized $112 million in cryptocurrencies previously drained through the so-called “pig butchering” scams. One particular account based in Los Angeles contained more than $66 million worth of digital assets. 

That type of fraud has become increasingly popular recently. An investigation assumed that many shell companies in the United Kingdom could be orchestrating such schemes.

“Pig butchering” refers to fattening a pig before slaughter. Criminals would contact victims via direct messages and offer them a great “investment” that could bring substantial profits. They might explain how they found the contact details and lure people into suspicious schemes (which, in many cases, are too good to be true).

Such wrongdoers could even develop a romantic relationship with their victims only to win their trust. Unfortunately for those who fall into that trap, there is no real love behind those fake gestures but only an attempt to steal one’s funds.

LA is Most Affected

The American authorities confiscated the digital assets from six accounts based in Los Angeles, the District of Idaho, and the District of Arizona. Prosecutors claimed that criminals used the addresses to launder proceeds of various crypto fraud, including “pig butchering” scams.

“The victims in pig butchering schemes are referred to as ‘pigs’ by the scammers because the scammers will use elaborate storylines to ‘fatten up’ victims into believing they are in a romantic or otherwise close personal relationship.

Once the victim places enough trust in the scammer, the scammer brings the victim into a cryptocurrency investment scheme,” an affidavit related to the case reads.

LA victims seem to be the most affected since the authorities seized approximately $66.4 million from an account based in the region. The FBI identified at least ten locals who were unable to withdraw their investment, with the aforementioned address containing some of their assets.

One of the victims – a woman whose name was not disclosed – was contacted on LinkedIn by a man named “Fei Kuang.” He advised her to join a crypto investment scheme by periodically sending some of her savings. When she tried to withdraw her money, “Fei Kuang” told her she had to pay a 20% in “taxes.” The woman (who invested around $2.5 million) realized she became a victim when the dubious platform kept demanding more funds.

US Attorney Martin Estrada said “high-tech fraudsters” have taken advantage of the hype surrounding the crypto sector to encourage inexperienced Americans to distribute their money into “get-rich-quick” schemes. He praised the efforts of the law enforcement agencies that took “strong measures” to alert the public and confiscated the tokens. 

Assistant Attorney General Kenneth Polite stated that these types of scams could have a devastating effect on families and cost individuals their entire life savings. He assured the authorities will “swiftly return” the confiscated assets to the victims. 

“In addition to our tireless efforts to disrupt these schemes, we must also work to raise public awareness and help inform potential victims: be wary of people you meet online; seriously question investment advice, especially about cryptocurrency, from people you have not met in person; and remember, investments that seem too good to be true, usually are,” he concluded.

‘Pig Butchering’ in the UK

As CryptoPotato reported earlier this year, more than 168 shell companies in the UK were suspected of running investment schemes, some of which were based on “pig-butchering” scams. The Bureau of Investigative Journalism and The Observer estimated that many of these firms were interconnected, while most directors were Chinese residents. 

MP Margaret Hodge suggested that increasing the fee to register a company in the Kingdom could be one way to halt such crime:

“Raising the fee to £100 would provide enough resources to our law enforcement without increasing costs for the taxpayer. Anything short of that and the world’s criminal and corrupt will see that they can continue to manipulate and exploit us.”

The post US DOJ Confiscates $112 Million Worth of Crypto Linked to ‘Pig Butchering’ Scams appeared first on CryptoPotato.