Two Alabama residents were defrauded out of more than half a million dollars in separate “pig butchering” cryptocurrency scams, the Alabama Securities Commission reports.
A Baldwin County woman lost approximately $185,000 and an Etowah County resident was fleeced of $395,000, the ASC said in a news release, adding that although the funds were mostly unrecoverable, the ASC seized $53,227of the Baldwin victim’s money and $73,927 of the Etowah victim’s funds.
The victims met the suspects through the mobile and online applications Bumble and Whatsapp, and the suspects claimed they could help the victims trade in cryptocurrency.
The Baldwin County woman was duped into believing the suspect was a cryptocurrency expert who could teach her how to successfully invest in crypto.
Following the suspect’s directions, the woman bought and transferred crypto to what she was told was a legitimate crypto platform. In reality, it was a wallet controlled by the suspect. The woman purchased more then $185,000 in crypto over three months, and the suspect told her it had appreciated to over $443,000. When she sought to make a withdrawal, the suspect told her she would have to send more crypto to pay a tax bill. That aroused the woman’s suspicion, and she contacted the ASC.
The victim in Etowah County also met the suspect through a WhatsApp online ad. The suspect persuaded the victim to join a fraudulent online crypto trading platform, saying it was associated with Charles Schwab and registered with the U.S. Securities and Exchange Commission. At the suspect’s direction the victim invested $395,310 in crypto in February and March. Wells Fargo Advisors grew suspicious when the victim attempted to withdraw a large sum for crypto investing and contacted the ASC.
“The ASC continues to see an increase in cryptocurrency fraud, including ‘Pig Butchering,’” ASC Director Amanda Senn said in the release. “The ASC’s ultimate goal in cyber and crypto crimes is to capture the fraudster and recover funds. Most cyber crimes, however, originate overseas and the transactions are instant, making it nearly impossible to apprehend the criminals or recover funds. Crypto assets are particularly challenging to recover as most often the cryptocurrency is either immediately transferred to numerous different wallet addresses, ‘swapped’ for different cryptocurrencies and redistributed to different blockchains, and/or ultimately transferred to an overseas exchange and converted to fiat currency. In crypto frauds, our special agents devote long hours to an extremely tedious tracing process (in contrast to traditional financial analyses) but often aren’t able to recover funds. It’s extremely gratifying when we can pursue seizures on behalf of investors.”