- 1 CFTC witnessed Debiex’s involvement in the Romance scam, which stole over $2.3 Million in customer funds.
- 2 The scam was carried out by three groups including solicitors, money mules, and customer service.
- 3 CFTC alerts the public to stay away from such scams and report them to the Division of Enforcement.
The scams and exploits in the cryptocurrency market are emerging as a never-ending story. On January 19, 2024, The US Commodity Futures Trading Commission (CFTC) uncovered another scammer in the crypto universe. CFTC filed charges against Debiex, a crypto exchange for fraud and misappropriation in an online romance scam. The crypto exchange is alleged for a $2.3 Million scam.
What Did Debiex Do Wrong?
Debiex was established in March 2022 to serve as a crypto exchange in the United States. The exchange targeted Asian Americans in a fraudulent scheme that was led by three groups including solicitors, money mules, and customer service.
Solicitors established contacts with the customers through at least one U.S.-based social media platform and convinced them to open accounts in Debiex. Customer service, on the other hand, was accountable for managing the accounts on the customer’s behalf. The third group, that is Money Mules accepts and misappropriates customers’ money. Their main accountability was to receive and move money obtained through the scams.
CFTC filed a civil enforcement action in the U.S. District Court against Debiex for misappropriately using over $2.3 Million of customers’ funds. Debiex is claimed to be a crypto exchange, but in actuality, the exchange was running a romance scam to steal money from Asian Americans.
As per the news, the crypto exchange’s anonymous officers and managers inspired customers to open fraud trading accounts with Debiex. The officers somehow managed to develop friendly and romantic relationships with the customers to make things work.
The crypto exchange indulged in this conspiracy since March 2022 and misled around five customers, stealing over $2.3 Million.
Furthermore, one name coming out as a relief defendant in the case is Zhang Cheng Yang (Zhang). His digital wallet was used by the scammers to misguide one of the customers. Additionally, despite using funds for trading on the customer’s behalf, Debiex misappropriated the customer’s assets.
Stay Away From Such Scams
illegal and fraudulent practices are at their peak, mainly in the cryptocurrency ecosystem. To stay safe and aware of such scams, the CFTC adopted several actions to make the customers aware.
the commission issued Fraud Advisories and Articles including Digital Asset Romance Scheme, Avoid Forex, Precious Metals, etc. Apart from this, the Commission also requested the public to investigate and verify the company details before making an investment.
To make it more clear, CFTC also provided a proper site like NFA BASIC to verify any company. If found inappropriate, customers can complain about the same to the Division of Enforcement.
Moreover, the case showcases the need for better security and regulations in the crypto world. Working together, the crypto community and regulators can make a difference.
Amanda Shinoy is one of the few women in the space invested knee-deep in crypto. An advocate for increasing the presence of women in crypto, she is known for her accurate technical analysis and price prediction of cryptocurrencies. Readers are often waiting for her opinion about the next rally. She is a finance expert with an MBA in finance. Quitting a corporate job at a leading financial institution, she now engages herself full-time into financial education for the general public.