SEC Busts ‘Pig Butchering’ Crypto Scams, Millions Lost!

• The SEC takes action against crypto scams, targeting fake exchanges that defrauded investors of millions.
• Pig Butchering scams use social media to build trust, then lure victims into fake crypto investments.

Recently, the Securities and Exchange Commission (SEC) has filed the first-ever litigation targeting the renowned “Pig Butchering” crypto scams, revealing fraudsters’ deceptive tactics used to prey on naïve victims.

This type of scam, which has been on the rise in recent years, uses social media platforms to establish bogus relationships and gain victims’ trust, eventually convincing them to invest in fraudulent crypto platforms before stealing their assets.

The SEC’s action targets three individuals and five firms linked to two fraudulent cryptocurrency exchanges, NanoBit and CoinW6, which collectively defrauded investors out of about $3.2 million.

The US SEC has filed two lawsuits for the first time against the "Pig Butchering Scams" cryptocurrency scam, suing three individuals and five companies. This type of scam uses social media to establish trust relationships, induce victims to invest in fake crypto platforms and…

— Wu Blockchain (@WuBlockchain) September 21, 2024

SEC Landmark Move Against Social Media Crypto Scammers

The actions are a significant step forward in the fight against cryptocurrency fraud, as it is the first time the SEC has initiated enforcement action, especially against Pig Butchering frauds, as we previously reported.

This type of fraud includes winning the victim’s trust via various social media networks, with scammers frequently pretending to be financial specialists or romantic partners to establish a sense of legitimacy.

In the instance of CoinW6, scammers pretended to be “young, attractive professionals,” engaging in long-term romantic relationships with potential victims via sites such as LinkedIn, Instagram, and WhatsApp.

The victims were then duped into investing in CoinW6, believing they would earn large daily returns through bogus staking, mining, and yield farming items.

This false sense of security eventually resulted in terrible financial losses when the scammers demanded additional payments for taxes and fees, or even blackmailed victims with threats to expose personal messages.

NanoBit’s Deception: How Investors Fell for Fake Promises 

Similarly, NanoBit’s operators took a different approach, presenting themselves as financial industry executives in WhatsApp groups.

They deceived at least 18 investors into believing NanoBit was a real trading platform by showing fraudulent information and falsely claiming to be affiliated with a legitimate SEC-registered broker named NanobitUS Securities.

When investors attempted to withdraw their funds, they were met with a slew of excuses, additional fees, or outright refusals before understanding they had been cheated.

The SEC’s Division of Enforcement Director stressed the fast expanding threat of relationship investment frauds, particularly those involving cryptocurrency investments, and encouraged the public to be wary of investment opportunities offered by strangers online.

These scams are becoming more popular among fraudsters, who use the apparent anonymity and technical intricacy of cryptocurrencies to deceive their victims. The SEC’s action attempts to disrupt these fraudulent businesses and safeguard investors from further harm.

The proceedings taken against NanoBit and CoinW6 reflect a larger issue: crypto frauds, which have plagued the sector in recent years.

Indeed, recent data from the Federal Bureau of Investigation (FBI) indicated that investors lost a stunning $5.6 billion to cryptocurrency fraud in 2023 alone, with a substantial amount ascribed to investment frauds, such as Pig Butchering schemes.

This development highlights the critical need for more severe regulatory measures and more awareness to keep such scams from destroying the lives of ordinary investors.