The Investor Protection Unit of the Delaware Department of Justice has issued a summary order against 23 crypto projects and individuals. The cease-and-desist order was issued to establishments involved in a cryptocurrency scam known as the “pig butchering scam.”
The Investor Protection Unit Issues an Order to Freeze Fraudulent Accounts
The Delaware Department of Justice’s Investor Protection Unit has issued an order to freeze accounts with fraudulently-obtained cryptocurrency. The summary order to cease-and-desist was issued against 23 firms and persons involved in a cryptocurrency scam known as the “pig butchering scam,”
Using a data analytics company, the Delaware Investor Protection Unit was able to trace cryptocurrency belonging to two Delaware pig butchering victims to several virtual wallets on various crypto exchanges. The cease-and-desist order prohibits the entities affiliated with the fraudulent wallets from withdrawing or moving assets owned by the complainants.
Ultimately, this prevents exchanges holding the wallets from allowing parties to move the fraudulently-acquired crypto, thus effectively freezing the accounts holding assets belonging to the Delaware victims.
The Pig Butchering Scam
The pig butchering scam is an old crypto scheme that has cost investors a lot of money. Pig butchering refers to the fraudulent act of scammers who build trust with their victims over time and then pressurize them to deposit more and more of their crypto assets into large digital wallets controlled by the scammer.
According to an FBI report, pig butchering is the way scammers “feed their victims with promises of romance and riches before cutting them off and taking all their money,”
First Step in Crypto Investor Protection
In an announcement on Wednesday, Attorney General Kathy Jennings announced that victims of pig butchering scams are groomed to make investments using crypto. Eventually, they discovered that what they thought was a safe investment was only a scam.
According to her, “Protecting investors from online scammers is extremely important. When victims lose money through cryptocurrency scams, including the pig butchering scam, it can be difficult to recover those funds. Today’s order takes a first step toward protecting Delaware investors from the pig butchering scam by freezing funds at risk from further transfer by the wrongdoers.”
Thousands of Victims Across Countries
Delaware’s Investor Protection Unit has received several complaints from its citizens reporting cases of crypto scams. They claim to have been contacted online by unknown people urging them to buy crypto for investment. After purchasing some crypto and receiving huge profits on their investments, the victims were encouraged to invest more. Unfortunately, the victims could never withdraw their funds and eventually lost all their cryptocurrency.
Several reports have shown that this scam is wide-ranging and has affected thousands of victims across the country with losses of billions of dollars.
How To Avoid Being a Victim
To prevent future occurrences, the Investor Protection Unit advises investors to be wary of strangers contacting them through any virtual platform to engage in frequent conversations or interact with people who claim to have a lot of profit in cryptocurrency.
Victims of the pig butchering scam or any other crypto investment scam are encouraged to file a complaint with Delaware’s Investor Protection Unit.