By Michael Scott
The U.S. regulator called Debiex a ‘fraudulent digital asset platform.’ It also filed civil charges against it for the supposed misuse of funds.
Debiex, a cryptocurrency exchange, is under investigation. This happened after allegations by U.S. regulators that senior staff members planned romantic relationships with potential clients to steal their funds.
CFTC Accuses Debiex for Crypto Fraud
A January 19 statement by the United States Commodity Futures Trading Commission (CFTC) revealed that Debiex’s staff purportedly misguided potential clients to acquire their trust prior to persuading them to open up accounts.
Despite Debiex convincing clients that their funds would be invested in crypto, they misused them for individual gains. According to the CFTC, Debix’s unnamed managers/officers established romantic or friendly links with potential clients by communicating lies to acquire their trust.
Later, they convinced them to open and finance trading accounts with the cryptocurrency exchange. Over the two-year period, only five victims have been identified. According to CFTC, the scam resulted in more than $2M theft.
Investors Suffer Losses in Crypto Investment
The statement shows that from nearly March 2022 until now, it is believed that Debix accepted and misused an estimated $2.3M from nearly five clients as part of the scam. Valentine’s Day is not far away.
As such, people have been warned to be careful as the day approaches. In this case, they should be cautious of signing up for crypto services or linking crypto wallets via romantic links.
A February 2022 report showed that the Federal Bureau of Investigation (FBI) had cautioned citizens during the week of Valentine’s Day to be cautious of the increasing cases of romance scammers trying to convince people to send funds to invest in crypto.
Rise of Crypto Crime
Recently, romance scammers have taken advantage of crypto’s popularity to scam and exploit victims for monetary gain. In May last year, Binance, a crypto exchange, came under criticism after a Texas lady claimed that the exchange should compensate her after being conned $8M by a man.
The relationship began on Tinder. According to the woman, Binance played a role since it offered exchange services to the swindler. Nevertheless, Amos Mazzant, a U.S. judge, said there was no proof to show that the exchange was involved in the theft.
Lately, romance scammers are embracing a quicker funds depletion strategy, shifting from the conventional strategy of developing trust via extensive interactions on dating applications.
In December last year, a digital media resource reported that targeted approval phishing is an upcoming strategy by romance scammers. It entails persuading the victim to approve a transaction, offering scammers access to wallets, and making it easy for them to drain funds quickly.