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State issues cease and desist order against cryptocurrency ‘pig butchering’ operations

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 an cryptocurrency schemes  known as “pig butchering.

In what the Attorney General’s office called a  “twist on the typical romance scam, victims of pig butchering scams are groomed over time to make investments using cryptocurrency, only to find that what they thought was a safe investment was a scam. The name stems from the scammers’ practice of “fattening” the victims before taking their assets – “butchering.”

“Protecting investors from online scammers is extremely important,” said Attorney General Kathy Jennings. “When victims lose money through cryptocurrency scams, including the pig butchering scam, it can be difficult to recover those funds. Today’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.”

Delaware’s Investor Protection Unit received complaints from residents  who were contacted online by persons who urged them to purchase cryptocurrency for investments. After buying  crypto and seeing big returns on their initial investments, the victims were encouraged to add funds.  Ultimately, they were never able to withdraw  funds and their cryptocurrency disappeared.  It is estimated the international scam involves thousands of victims across the country with losses running into the billions of dollars.

Working with a data analytics company, the Unit traced cryptocurrency belonging to two Delaware complainants to a number virtual wallets on various crypto exchanges.

The order effectively freezes the accounts holding assets belonging to the Delaware victims.

The Investor Protection Unit offers the following tips for investors:

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

If you believe you are a victim of the pig butchering scam or other cryptocurrency investment scam, a complaint can be filed with the Investor Protection Unit at de.gov/investorcomplaint.

 

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