In a significant move, the Commodity Futures Trading Commission (CFTC) has initiated legal action against Debiex, a cryptocurrency platform, alleging its involvement in an elaborate romance fraud. The CFTC, in a statement released on Friday, revealed that the crypto scam resulted in the misappropriation of $2.3 million, primarily affecting Asian American victims.
The regulatory body accused Debiex of orchestrating a fraudulent online romance scheme, utilizing deceptive tactics to forge friendly or romantic relationships with potential customers. Subsequently, the victims were allegedly persuaded to open and fund trading accounts with Debiex, marking another distressing incident of customer funds being misused under the guise of trading activities.
CFTC Exposes Debiex’s Arizona Crypto Scam
As per the CFTC’s complaint lodged in the U.S. District Court for the District of Arizona, the deceptive scheme has persisted since March 2022, affecting a minimum of five individuals. Noteworthy is the revelation in the complaint that, despite the solicitation of funds, there was no tangible trading conducted on behalf of the customers.
The complaint names Zhāng Chéng Yáng (Zhang) as a relief defendant, suggesting his potential role as a money mule in the scam. It was also revealed that Debiex operated public-facing websites to execute the fraudulent activities.
In response to the growing threat of romance scams in the crypto space, the CFTC issued a Romance Scam Fraud Advisory. The advisory is a cautionary measure for individuals engaging in online dating and social media. It warns them against falling victim to scams that send money to fraudulent platforms claiming to trade assets like cryptocurrencies. The CFTC emphasizes the importance of verifying a company’s registration with the CFTC before making any investment.
The regulatory entity is actively pursuing legal measures against Debiex, aiming for resolutions that include compensating defrauded customers, recovering wrongfully obtained profits, imposing civil monetary penalties, implementing trading bans, and securing a permanent injunction to prevent any future violations of the Commodity Exchange Act (CEA) and Commodity Futures Trading Commission regulations.
As authorities intensify efforts to address emerging threats in the cryptocurrency space, this case underscores the need for enhanced vigilance and due diligence among investors to protect themselves from evolving forms of digital fraud.