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