The Federal Bureau of Investigation (FBI) is investigating a ring of crypto romance scammers behind up to $5 million in scams through fraudulent investment schemes.
The scammers often feign romantic interest in their victims and tend to spend a great deal of time cultivating trust with their victims before targeting them with fraudulent investment schemes.
Federal prosecutors in North Carolina are tracking and looking to seize about $4.99 million recovered from suspicious Tether wallets linked to an extensive crypto romance scam.
The $4.99 million was seized through a search warrant carried out in August and is now in the custody of the U.S. Marshal Service.
Pig butchering scams on the rise
Romance scams also known as pig butchering are on the rise and most of them can be traced to Southeast Asian countries.
Pig butchering involves scammers posing as potential lovers online to build trust with their victims. the victims when they must have garnered significant trust with the scammers are lured into a fake crypto investment scheme where they lose all their money.
The romance scam operation targeted at least 71 victims, according to the FBI, including a 60-year-old Angier resident and an 83-year-old from Minnesota.
They were lured into a lucrative crypto investment on a fraudulent trading platform called Bitkanant, a spoof of the legitimate Singapore-based Bitkant exchange.
Once the victims transferred the USDT to the scammer’s wallets, thinking it was a regular investment, they were informed that their accounts were frozen and withdrawals were disallowed until additional taxes and fees were paid.
The additional taxes scheme is used to extract even more funds from the victims with the original investment never released even if the victim pays an additional fee.
Court documents reveal that the scammers use all kinds of fake identities mirroring common American names to target victims.
Two of these victims identified by the FBI lost upwards of $2.75 million to such romance scams.
What to Know
- In countries like Nigeria, romance scams are negligible and Ponzi schemes are more mainstream in this jurisdiction. The Nigerian SEC recently proposed a bill to jail perpetrators of crypto Ponzi schemes for up to 10 years with an additional fine of $12,000.
- The proposed Bill was applauded by the Nigerian crypto community and stakeholders stating that if passed, the law will serve as a deterrent to Bad actors polluting the Nigerian crypto space.
- Pig butchering scam got its name from South East Asia where the practice is prevalent. It stems from the slow process of fattening up a pig before slaughtering it and is likened to building trust with a victim before stealing their money.