Over the course of two days, the California Department of Financial Protection and Innovation (DFPI) has issued 17 different warnings to cryptocurrency brokers and websites it believes to be fraudulent.
Among the companies on the list are, to name a few, Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamenltd/Tosal Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, and ZC Exchange.
Additionally, eth-Wintermute.net and UniSwap LLC are two imitation websites impersonating two well-known names in the cryptocurrency industry.
The DFPI’s consumer alert page currently lists 17 alerts from the days of December 27 and 28 warning that these businesses “appear to be engaged in fraud against California consumers.”
The DFPI rarely posts so many alerts at once, indicating that the number of reports of cryptocurrency scams may have increased in the final months of the year. Occasionally, the DFPI will post alerts about company investigations or alerts about specific incidents.
The DFPI last issued such a significant number of crypto scam alerts on June 15, when it raised the red flag over 26 suspect crypto platforms.
The warnings were issued in response to citizen complaints about the brokers and websites; according to the DFPI, the complainants claimed to have lost anywhere from $2,000 to as much as $1.2 million in some instances. However, the DFPI only claims that these websites “appears to be engaged in fraud.”
Most of these alerts claim that pig-slaughtering scams, in which a person or group creates a false online identity to forge relationships or friendships on social media, messaging services, and dating apps, are common.
In a romance or pig slaughter scam, the con artist would typically spend weeks or months cultivating the fictitious family to win the victim’s trust before gradually changing the subject to investments and luring them in with investment “opportunities” that are frequently too good to be true.
The ultimate goal is to convince the victim to invest in cryptocurrency either by sending money to a dubious wallet address or through a copycat website, like UniSwap LLC and eth-Wintermute.net in this case.
In addition to killing pigs, the alleged con artists are also accused of using a technique known as the “Advance Fee Scheme,” in which they demand sizable sums of money to process fictitious withdrawals from their scam websites.
If the target falls for it, the con artist not only makes off with the initial investment but also with a bonus slice, before immediately cutting off all contact.
“The DFPI advises customers to proceed with the utmost caution before responding to any solicitation offering financial or investment services. To confirm whether a provider of financial or investment services is authorized to operate in California,” the DFPI said.