2 - 3 minute read
The California Department of Financial Protection and Innovation (DFPI) has issued 17 warnings against cryptocurrency brokers and websites that it suspects of being fraudulent. The list includes Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamenltd/Tosal Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, ZC Exchange, as well as two copycat sites pretending to be major players in the crypto world: eth-Wintermute.net and UniSwap LLC.
According to the DFPI, these companies “appear to be engaged in fraud against California consumers.” The regulator has received complaints from citizens who have lost anywhere from $2,000 to $1.2 million in some cases. Most of the warnings pertain to “pig-slaughtering scams,” which involve a fake identity being created online in order to build fake relationships or friendships through social media, messaging apps, or dating apps. The goal is to gain the victim’s trust before gradually introducing investment “opportunities” that are often too good to be true and eventually convincing them to invest in crypto through a copycat version of a legitimate website or by transferring funds to a fraudulent wallet address.
The DFPI has also noted the use of an “Advance Fee Scheme,” in which the perpetrators request large amounts of money to process fake withdrawals from their scam sites. If the victim falls for it, the scammer not only keeps the initial investment but an additional fee, before cutting off all communication.
The DFPI’s warning comes as the number of cryptocurrency scams appears to be increasing. The regulator last issued a large batch of crypto scam alerts in June, when it warned of 26 dubious platforms. The DFPI advises consumers to “exercise extreme caution before responding to any solicitation offering investment or financial services” and to check whether an investment or financial service provider is licensed in California.
