The DFPI issued many crypto scam alerts in June when it raised the red flag over 26 suspect crypto sites.
What are these websites?
Over 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 mention a few, Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamenltd/Total Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, ZC Exchange.
Additionally, eth-Wintermute.net and UniSwap LLC are two imitation websites impersonating two well-known names in the cryptocurrency industry. When this article was written, the DFPI's 17 alerts were placed on the consumer alert website throughout December 27 and 28, advising that these businesses appear to be involved in fraud against California consumers.
What caused the rise of these scams?
The DFPI (1) seldom posts so many notifications at once, indicating that the number of complaints of cryptocurrency scams may have increased in the last months of the year. Occasionally, the DFPI will broadcast notices concerning company investigations or alerts about specific instances. The DFPI issued many crypto scam alerts on June 15, when it raised the red flag over 26 suspect crypto sites.
The DFPI stated that the warnings were issued in response to public concerns against the brokers and websites. In certain instances, they have claimed to have lost anywhere from $2,000 to $1.2 million (2). However, the DFPI claims these websites "appear to be engaged in fraud." Most of these alerts claim that pig-slaughtering scams are common in which a person or group creates a false online persona to forge ties or friendships on social media, messaging services, and dating apps.
How the scam works
In a romance or pig slaughter scam, the con artist would often spend weeks or months cultivating the fictitious family to win the victim's confidence before gradually changing the subject to investments and luring them in with investment "opportunities" that are frequently too good to be true. The ultimate objective is to achieve the victim to send money to a shady wallet address or invest in cryptocurrency through a fake website that looks like a real one, such as UniSwap LLC and eth-Wintermute.net in this case.
The alleged con artists are also accused of using a technique known as the "Advance Fee Scheme," in which they demand substantial sums of money to process fictitious withdrawals from their fraudulent websites. If the target falls for it, the con artist makes off with the initial payment and a bonus slice before immediately breaking off all communication. The DFPI advises customers to proceed with the utmost caution before responding to any solicitation providing financial or investing services. To determine if a source of financial services or investments.
