The US Commodity Futures Trading Commission (CFTC) says it is taking legal action against a “fake” crypto exchange that allegedly defrauded investors using a pig slaughter scheme.
Pig slaughter is a form of romance scam in which targeted victims are sent unsolicited messages on social media, dating apps or via text messages to build relationships and gain trust before introducing a so-called crypto investment opportunity.
In a statement, the CFTC said it has filed a civil enforcement action against Debiex, alleging that the platform misappropriated funds that victims intended for digital asset trading.
According to the agency’s complaint, unidentified Debiex officials and managers cultivated friendly or romantic relationships with potential victims to induce them to open and fund trading accounts on the exchange.
Debiex allegedly used the websites https://www.debiex.com and https://www.debiex.net, which were created in March 2022, to target Asian Americans living in the United States.
“Instead of using the funds to trade on behalf of the customers as promised, Debiex misappropriated the customers’ digital assets. Unbeknownst to customers, and as claimed, Debiex’s websites merely mimicked the features of a legitimate live trading platform and the ‘trading accounts’ on the websites were a complete ruse. No actual trading took place on behalf of the customers.”
The CFTC alleges that Debiex accepted and embezzled approximately $2.3 million from approximately five victims of the scheme.
The regulator also names a certain Zhang Cheng Yang as a defendant, alleging that he acted as a money mule for Debiex as his digital wallet was used to embezzle the funds of at least one of the victims.
CFTC Commissioner Kristin N. Johnson explains why the scheme was targeted at a specific demographic.
“In the current case, the fraudsters used a shared native language and other similar evidence of a shared identity to build trust – only to later exploit these intimate ties.”
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
follow us on TweetFacebook and Telegram
Surf to the Daily Hodl mix
Generated image: Midjourney