CFTC Charges Crypto Exchange Debiex With Fraud and Misappropriation for Running ‘Online Romance’ Scam
The U.S. Commodity Futures Trading Commission (CFTC) says it is taking legal action against a “bogus” crypto exchange for allegedly defrauding investors using a pig-butchering scheme.
Pig butchering is a type of romance scam that involves sending targeted victims unsolicited messages on social media, dating apps or through text messages to build relationships and gain trust before introducing a purported crypto investment opportunity.
In a statement, the CFTC says it filed a civil enforcement action against Debiex, claiming that the platform misappropriated funds that the victims intended for digital asset commodity trading.
According to the agency’s complaint, unidentified officers and managers of Debiex cultivated friendly or romantic relationships with potential victims to get them to open and fund trading accounts at the exchange.
Debiex allegedly used the websites https://www.debiex.com and https://www.debiex.net which were created in March 2022 to target Asian Americans living in the United States.
“Instead of using the funds to trade on behalf of the customers, as promised, Debiex misappropriated the customers’ digital assets. Unbeknownst to the customers, and as alleged, the Debiex websites merely mimicked the features of a legitimate live trading platform and the ‘trading accounts’ on the websites were a complete ruse. No actual trading took place on the customers’ behalf.”
The CFTC alleges that Debiex accepted and misappropriated around $2.3 million from approximately five victims of the scheme.
The regulator also names a certain Zhang Cheng Yang as a relief defendant, alleging that he acted as a money mule for Debiex since his digital wallet was used to misappropriate at least one of the victims’ funds.
CFTC Commissioner Kristin N. Johnson explains why the scheme targeted a particular demographic.
“In the current case, the fraudsters used a shared native language and other similar evidence of shared identity to build trust – only to later exploit these intimate connections.”
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Author: Rhodilee Jean Dolor
