Delaware Department of Justice issues cease and desist over cryptocurrency scam

By Joseph Edelen
Posted 9/29/22

The Delaware Department of Justice’s Investor Protection Unit has issued a summary order to cease and desist against 23 entities and individuals involved in a cryptocurrency scam, Attorney General Kathy Jennings announced Wednesday.

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Delaware Department of Justice issues cease and desist over cryptocurrency scam

Posted

The Delaware Department of Justice’s Investor Protection Unit has issued a summary order to cease and desist against 23 entities and individuals involved in a cryptocurrency scam, Attorney General Kathy Jennings announced Wednesday.

Known as the “pig-butchering scam,” victims are groomed over time to make investments using cryptocurrency, only to find that what they thought was a safe investment was not. The name stems from the scammers’ practice of “fattening” the victims before absconding with their assets (“butchering”).

“Protecting investors from online scammers is extremely important,” Ms. Jennings said. “When victims lose money through cryptocurrency scams, including the pig-butchering scam, it can be difficult to recover those funds. (Wednesday’s) order takes a first step toward protecting Delaware investors from the pig-butchering scam by freezing funds at risk from further transfer by the wrongdoers.”

The unit received complaints from Delawareans who were contacted online by unknown persons who urged them to purchase cryptocurrency for investments. After purchasing and seeing large returns on those investments, the victims were encouraged to invest more.

Ultimately, they were never able to withdraw the funds, and their cryptocurrency disappeared. It is estimated that this international scam involves thousands of victims across the country with losses into the billions of dollars.

With the help of a data analytics company, the unit traced cryptocurrency belonging to two Delaware complainants to a number of virtual wallets on various exchanges. The summary order prohibits the people and entities affiliated with the wallets from withdrawing or moving assets owned by the complainants, effectively freezing the accounts.

The Investor Protection Unit offers the following tips:

  • Be wary of someone you don’t know contacting you through any virtual platform and looking to engage in frequent conversations.
  • Don’t get drawn into online conversations with unknown people who claim to have made a lot of money in cryptocurrency.
  • Remember that there is no such thing as a risk-free investment. If something sounds too good to be true, it probably is.

Deputy attorney general Lindsay Nasshorn and investor protection director Jillian Lazar are leading this matter for the Department of Justice, with support from deputy attorneys general Victor Clark and Joey Tabler, as well as paralegal Harvey Thomas.

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