FBI Seizes: The FBI has recently seized more than $6 million in cryptocurrency linked to a scam operating out of Southeast Asia that targeted American citizens. According to the FBI announcement on September 26, fraudsters deceived victims into believing they were investing in legitimate projects, which ultimately caused significant financial harm.
Chad Yarbrough, Assistant Director of the FBI’s Criminal Investigative Division, emphasized the severe impacts of such crypto fraud schemes on Americans and highlighted the importance of ongoing efforts to combat these threats. He noted that this seizure is among the largest carried out by the FBI this year.
Growing Challenges in Combating Cryptocurrency Fraud
This incident underscores the escalating difficulties in tackling cryptocurrency-related fraud in an increasingly global market. Yarbrough stated, “These types of schemes are devastating, and they’re impacting thousands of Americans every day. The FBI has seen victims lose millions of dollars, often taking out second and third mortgages on their homes in hopes of finding the next big investment opportunity.”
Victims were tricked into withdrawing cash from their bank accounts to invest in crypto wallets, which were then funneled to fraudulent offshore platforms. In an attempt to build trust, scammers initially allowed limited withdrawals, but soon victims found themselves completely cut off, losing all their investments. This tactic, known as “pig butchering,” involves luring victims in with promises of high returns before ultimately defrauding them.
The FBI indicated that such scams are not new but have become a rising threat in the expanding cryptocurrency landscape. This long-term investment fraud, referred to as Sha Zhu Pan or “Pig Butchering,” involves a slow and sustained buildup of trust, often facilitated through social or dating apps, before the victim is “slaughtered,” meaning their funds are stolen once they invest significant amounts.
Originating in China around 2016, this type of scam has spread throughout Southeast Asia, especially during the COVID-19 pandemic. Alarmingly, many perpetrators are often former victims themselves, coerced by organized crime groups into carrying out these frauds.
The prevalence of these scams has escalated, with a report from October 2023 revealing that 12% of Americans using dating apps reported being victimized, up from 5% in 2018.
