The Department of Justice (DoJ) has reportedly seized about $112 million worth of cryptocurrency stolen through various “cryptocurrency confidence scams.” It recovered the funds from six different accounts.
Confidence scams traditionally rely on the scammer garnering trust with the victim, sometimes over very long periods of time, before acting.
“Now that we have seized this virtual currency, we will seek to swiftly return it to victims,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “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.”
Fraudsters spend weeks to months building relationships with their victims, taking advantage of them through social media sites, dating apps, “misdialed” phone calls or texts, or other forms of social engineering.
After forming the relationship, eventually, the concept of investing in cryptocurrency is introduced, where the fraudster will then direct the victim to a malicious investment website, sometimes disguised as a real trading platform. The user will see deceptively large gains, even being able to pull out small earnings to build up more trust. Once a user deposits a substantial amount, however, they find that they can no longer remove their money.
These schemes, often times dubbed “Sha Zhu Pan,” (loosely translated from Chinese as “pig butchering) don’t stop there. Afterward, they’ll continue to drain a target’s savings by requesting additional money, fees, or taxes, often framed as a way for people to get their money back (which never happens, of course).
While recovering $112 million worth of stolen funds is an important step against scammers, the FBI’s Internet Crimes Complaint Center (IC3) reported that the amount of money stolen through investment fraud totaled over $3.31 billion dollars.
If you are the victim of a crypto scam or know somebody who is, US residents are encouraged to contact www.fbi.gov/cryptoguard, contact their local FBI field office, or report to IC3.
The US is currently seeking out the rightful owners of the stolen funds while further investigations into the investment fraud schemes are being carried out by the FBI Pheonix Division.