Crypto Scam: CFTC Accuses Debiex of $2.3 Million Romance Fraud

The Commodity Futures Trading Commission (CFTC) has filed a civil action against crypto platform Debiex, the agency said in a statement on Friday. The crypto scam was reportedly an elaborate romance fraud.

The CFTC accused the digital asset platform of engaging in a fraudulent online romance scam that misappropriated $2.3 million in customer funds, primarily from Asian American victims.

CFTC files civil action

According to the CFTC’s complaint filed in the U.S. District Court for the District of Arizona, Debiex allegedly used deceptive tactics to cultivate friendly or romantic relationships with potential customers. Subsequently, they allegedly persuaded these individuals to open and fund trading accounts with Debiex.

This is yet another instance in which customer funds were misappropriated in the name of trading.

The alleged fraudulent scheme is said to have been ongoing since March 2022 and has affected at least five individuals. In reality, no actual trading occurred on behalf of the customers.

The CFTC’s complaint also includes Zhāng Chéng Yáng (Zhang) as a relief defendant, indicating his potential involvement as a money mule. The complaint also revealed that Debiex operated public-facing websites to carry out the fraud. 

Regulator warns about romance scams

The commodities regulator stated, “In its continuing litigation against Debiex, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.”

The CFTC also issued a Romance Scam Fraud Advisory, cautioning users of online dating and social media scams. These scams reportedly send money to fraudulent websites that claim to trade assets like crypto. The CFTC advises the public to verify a company’s registration with the CFTC before investing funds.

In a separate incident, CoinGape recently reported that an Indian engineer suffered a nearly $15,000 loss after falling victim to a digital scam on Telegram. That said, it is worth noting that cryptocurrency crimes led to losses amounting to $1.595 billion in December alone.

Also Read: Crypto Crime Trend: Sanctioned-Transactions Surged Despite Recovery in 2023