The US Commodity Futures Trading Commission (CFTC) said it is taking legal action against a “sham” cryptocurrency exchange for allegedly defrauding investors using a pig slaughter scheme.
Pig slaughter is a type of romance scam that involves spamming targeted victims on social media, dating apps, or through text messages to build relationships and gain trust before offering them an alleged investment opportunity in cryptocurrencies.
In a statement, the CFTC said it had filed a civil enforcement case against Debiex, alleging that the platform misappropriated funds that victims intended to trade digital asset commodities.
According to the agency's complaint, unidentified Debiex officers and directors established friendly or romantic relationships with potential victims to get them to open and fund trading accounts at the exchange.
Debiex allegedly used the websites https://www.debiex.com and https://www.debiex.net created in March 2022 to target Asian Americans living in the United States.
“Instead of using the funds to trade on behalf of clients, as promised, Debiex misappropriated clients’ digital assets. Without the clients’ knowledge, as alleged, the Debiex websites mimicked the features of a legitimate live trading platform and the ‘trading accounts’ on the websites were a complete sham. Any actual trading is done on behalf of clients.
The CFTC alleges that Debiex accepted and embezzled about $2.3 million from about five victims of the scheme.
The regulator also named a person named Zhang Cheng Yang as a relief defendant, alleging that he had served as a money mule for Debiex since his digital wallet was used to embezzle at least one of the victims' funds.
CFTC Commissioner Christine N. Johnson, why the scheme targets a specific demographic group.
“In the current case, the fraudsters used a shared indigenous language and other similar evidence of shared identity to build trust – only to exploit these intimate connections later.”
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