Debiex: Crypto wallet trails lead to $2.3 million ‘Pig Butchering’ scammer Zhāng Chéng Yáng

Rick Steves

The essence of the “pig butchering” scam involves fraudsters contacting potential victims through various platforms like dating services, social media, or direct messages, often pretending it’s a wrong number. Over time, they establish a relationship, gain the victim’s trust, and eventually introduce a business investment opportunity using cryptocurrency.

The Commodity Futures Trading Commission (CFTC) has taken legal action against Debiex, filing a civil enforcement complaint in the U.S. District Court for the District of Arizona. This case revolves around accusations that Debiex fraudulently misappropriated $2.3 million from customers, using these funds under the guise of digital asset commodity trading.

The heart of the complaint lies in the alleged use of romance scam tactics by Debiex’s officers and/or managers. According to the CFTC, from around March 2022, Debiex cultivated relationships with potential customers, often through social media platforms, under false pretenses. These relationships, sometimes romantic or friendly, were a means to an end – to persuade individuals to open and fund trading accounts with Debiex.

Debiex utilized Zhang’s digital asset wallet

The essence of the “pig butchering” scam involves fraudsters contacting potential victims through various platforms like dating services, social media, or direct messages, often pretending it’s a wrong number. Over time, they establish a relationship, gain the victim’s trust, and eventually introduce a business investment opportunity using cryptocurrency. The investment platforms used in these schemes are fraudulent and controlled by the scammers, displaying false gains to entice further investments. Eventually, victims find themselves unable to withdraw or recover their funds, leading to significant financial losses.

The case also highlights the involvement of Zhāng Chéng Yáng (Zhang), who is named as a relief defendant. The allegations suggest that Debiex utilized Zhang’s digital asset wallet in the misappropriation of customer funds, indicating that he might have played a role as a money mule in this scheme.

The CFTC’s commitment to justice and its mission to protect customers from fraud is evident in its pursuit of this case. The Commission is seeking various forms of redress, including restitution for the victims, disgorgement of illicit gains, civil monetary penalties, and trading bans.

This case is a stark reminder of the risks associated with digital asset trading, especially when dealing with unverified platforms. The CFTC continues to warn the public through advisories about the rising incidence of online fraud, particularly romance scams involving forex, precious metals, and digital assets.

‘Pig Butchering’ scams on the rise

The U.S. Department of Justice has recently charged four individuals for their alleged involvement in an $80 million cryptocurrency investment scam, often referred to as “pig butchering.”

The scam, which originated in Southeast Asia, combines elements of investment schemes, romance scams, and cryptocurrency fraud. It’s named “pig butchering” based on the Chinese phrase “Shāz Hū Pán,” which metaphorically describes the process of gaining a victim’s trust and then exploiting it for financial gain.

Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu are accused of conspiring to open shell companies and bank accounts to launder the proceeds from these scams, which included at least 284 transactions and resulted in over $80 million in victim losses. More than $20 million was directly deposited into accounts associated with the defendants.

    Read this next

    Digital Assets

    Bitcoin nears $62,000, sparking retail buying frenzy

    Bitcoin dashed past the $61,000 barrier on Wednesday, a peak it hadn’t touched since the waning days of November 2021.

    Market News

    OPEC+ Extension of Oil Output Cut Causes Rally

    The dynamics surrounding crude oil are indeed fascinating, given its unique role as both a globally traded commodity and a vital energy source deeply influenced by the OPEC+ alliance’s decisions.

    Institutional FX

    DKK reports 226% growth in 2023 with eyes on African expansion

    “Our numbers are beginning to show how we are powering, the growth required by emerging markets, and we plan for the success of our strategies to continue to thrive in 2024.”

    Industry News

    ‘WTF’ as in ‘What The Fraud?’, Sumsub’s new podcast on digital fraud

    “We found a lack of informative podcasts talking about digital fraud threats and prevention for business owners. So, we decided to dive in and share our expertise along with industry top minds in the ‘What The Fraud?’ podcast.”

    Digital Assets

    Coin Metrics integrates market data from Cboe Digital

    “We are pleased to work with Coin Metrics and believe that having quality and timely data, and systems to analyze that data, will help crypto markets mature as well as evolve to become a core component of a diversified investment portfolio. We are focused on providing access and solutions to the spot and derivatives crypto market in a way which mirrors an investor’s experience with traditional markets.”

    Fintech

    AU10TIX launches KYB solution to address regulatory requirements

    “Our customers have been requesting a comprehensive KYB solution, because money laundering and fraud have become far too prevalent in the corporate world. Our unified KYB/KYC solution is essential for identifying bad actors and maintaining a safe business environment in 2024.”

    Digital Assets

    Japan Is Rapidly Emerging As A Global Leader In Compliant Crypto Payments

    Japan is often hailed as one of the most forward-thinking nations in the crypto industry, with its government taking a very positive stance on the potential of concepts such as Web3. 

    Digital Assets

    Kraken launches institutional arm

    “If you already work with Kraken, you know how much we care about offering high quality products and a client-first experience. We’ve been the leading crypto exchange for more than a decade and through Kraken Institutional, we’ll offer the same deep expertise and cutting-edge technology to propel trading excellence for institutions.”

    Fintech

    Centroid integrates with brokerage solutions provider GTN

    “We are thrilled to integrate GTN into Centroid Bridge, our multi-asset connectivity bridging engine. This integration allows our clients to gain access to the wide range of multi-asset products offered by GTN.”

    <