$112 million of crypto from investment scams seized by DOJ
University of San Diego finance professor Dan Roccato’s best tip for avoiding fiscally detrimental scams is using credit cards – rather than debit cards – when making online purchases.
A sizable amount of cryptocurrency that came from investment scams recently got seized by the Department of Justice (DOJ).
The DOJ said Monday the estimated value of the virtual currency it had seized amounted to $112 million. The funds had been in six accounts purportedly controlled by scammers and used in connection to cryptocurrency confidence scams for laundering purposes, according to a press release.
District judges in Arizona, central California and Idaho gave the go-ahead for the seizures.
DEPARTMENT OF JUSTICE REVEALS MASSIVE $3.36B CRYPTO SEIZURE
The agency said scammers obtained virtual currency by tricking victims into investing in fake crypto trading platforms after having connected online and becoming close to them. Such schemes are referred to as “Sha Zhu Pan” or “pig butchering,” according to the DOJ.
The DOJ said Monday the estimated value of the cryptocurrency it seized amounted to $112 million. (Reuters / Dado Ruvic / Illustration / File / Reuters)
Of the $3.31 billion investment scam losses reported to the FBI last year, the majority were “pig butchering” and other crypto-related schemes, the DOJ said. They represented $2.57 billion in losses in 2022.
The Department of Justice says the funds had been in six accounts purportedly controlled by scammers and used in connection to cryptocurrency confidence scams for laundering purposes. (Stefani Reynolds / AFP via Getty Images / File / Getty Images)
Assistant Attorney General Kenneth Polite Jr. said in a statement that authorities “will seek to swiftly return” the seized virtual currency to the victims.
“These particularly vicious frauds – where scammers carefully cultivate relationships with their victims over time – have devastated families and cost individuals their life savings,” he said.
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Victims of “pig butchering” often get locked out of their funds by the scammers running the schemes after they have invested a large enough amount of money, the DOJ said. That, according to the press release, serves as a way for the perpetrators to obtain more funds by requiring “additional investments, taxes, or fees” for the victim to supposedly be re-granted access.
The Financial Industry Regulatory Authority (FINRA) has said some red flags to be aware of in connection to “pig butchering” scams include “unsolicited messages from unknown contacts,” online acquaintances seeking personal financial information, investment solicitations by virtual people for “specific financial products” and “guaranteed” large returns.
Victims of “pig butchering” often get locked out of their funds by the scammers running the schemes after they have invested a large enough amount of money, the DOJ said. (Reuters / Dado Ruvic / Illustration / File / Reuters Photos)
In an October public service announcement, the FBI urged people who are offered an investment opportunity by “strangers or long-lost contacts” online to verify it and to watch out for websites falsely portraying themselves as those of real financial institutions and exchanges. They should also be cautious about downloading or using “suspicious-looking” investing apps, the FBI said.
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“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,” Polite also said in a statement.
