The U.S. Department of Justice (DOJ) revealed on Monday that it has successfully prevented certain fraudulent cryptocurrency investment schemes by seizing virtual currency worth $112 million. Judges in the District of Arizona, the Central District of California, and the District of Idaho gave their approval for the enforcement of seizure orders for a total of six accounts containing cryptocurrency linked to investment scams.
According to the documents filed in the case, the accounts involving virtual currency were reportedly utilized to launder the profits made from numerous cryptocurrency confidence frauds. In these types of crypto scams, con artists build long-term relationships with victims they meet online, with the end goal of eventually persuading the victims to invest their cash in bogus cryptocurrency trading platforms. In actuality, however, the cash that was purportedly paid by victims was sent to bitcoin addresses and accounts that were controlled by the scammers and their accomplices.
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While speaking about the latest crypto crackdown, assistant attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, was quoted as saying:
Transnational criminal organizations are combining confidence scams with technological savvy to swindle Americans out of their hard-earned funds.
The FBI’s Internet Crimes Complaint Center (IC3) received $3.31 billion in losses related to investment fraud in 2022, the highest amount of any scam reported by the general public. Scams using cryptocurrency, such as “pig butchering,” represented the vast bulk of these schemes. The amount of money reported to have been lost as a result of these schemes increased by an astounding 183% between 2021 and last year, reaching $2.57 billion.
The FBI claimed that victims between the ages of 30 and 49 made the most reports of losing funds in crypto investment schemes. Scammers frequently “target their victims through social networking and online communication platforms, dating websites, and phone calls and text messages” — which are also referred to as “Sha Zhu Pan” — a Chinese phrase that loosely translates to “pig butchering.” Scammers gradually present the idea of investing in cryptocurrencies after earning the victims’ trust, often over a period of months. Following that, they drive victims to crypto investing websites or accomplices posing as customer service or investment gurus.
These scammers are already in possession of such websites that mimic genuine trading platforms, malicious mobile apps that victims download, and hostile smart contracts that can be accessed using cryptocurrency wallets. Following a victim’s initial “investment,” the platforms claim to demonstrate significant gains being made. Additionally, to further foster trust in the plan, victims are occasionally given the option of withdrawing some of their initial earnings. As the U.S. DOJ officially states “It is not until a large investment is made that victims find that they are unable to withdraw their funds”.
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