These cybercriminals reach out to romance-seekers from dating apps like Tinder before convincing them to invest in their fraudulent cryptocurrency investment schemes.
The New Jersey Bureau of Securities has ordered three website operators to stop luring romance-seeking victims into their fraudulent cryptocurrency investment schemes.
The three firms hit with the cease and desist orders were Meta Capitals Limited, Cresttrademining Limited and Forex Market Trade, according to a Feb. 3 press release from New Jersey’s Attorney General Matthew Platkin.
All three firms claimed to be cryptocurrency trading platforms, where they would entice victims into copying the trades of their “expert traders” so that they can make big returns.
But to recruit them into the scheme, these companies often resort to romance seekers on online dating apps like Tinder to recruit them through what is known as the “pig butchering” scam.
Online scammers are taking advantage of investors in a new scam known as “pig butchering” where victims are “fattened up” before scammers take all they can. With today’s cease and desist orders we’re protecting NJ from cryptocurrency fraud. https://t.co/Q6xX5l4Ohk
— Attorney General Matt Platkin (@NewJerseyOAG) February 3, 2023
“Pig butchering” is a scam where cybercriminals use social media to contact victims, instigate a romantic relationship and then lure them into a fraudulent cryptocurrency investment scheme once they’ve gained their trust.
Platkin said they’re working hard to protect New Jersey residents getting lured into the investment scam:
“These scammers build up a sense of comradery between them and their victim—all to squeeze every cent they possibly can out of these people with promises of huge returns on investments.”
“We are working around the clock to protect the victims of these types of scams and to show these scammers our laws still apply in cyber space,” Platkin added.
Acting Director Cari Fais of the Bureau’s Division of Consumer Affairs also hopes that the enforcement actions will make it clear that they will “pursue scammers who prey on people’s trust.”
The crackdown comes as the United States Federal Bureau of Investigation (FBI) reported about 4,300 victims to have lost a combined $429 million from pig butcher scams alone in 2021. No statistics have been released yet for 2022.
Chief of the Bureau of Securities Amy Kopleton suggested that the pig butcher scam works well for fraudsters because their target audience is already in a position of vulnerability.
“Even the savviest of investors can have a hard time recognizing fraud when it’s being perpetrated by someone for whom they have a romantic interest.”
Related: Navigating the world of crypto: Tips for avoiding scams
The companies hit with the cease and desist orders were also found to have violated New Jersey securities laws by offering and selling unregistered securities, the Bureau said.
On top of that, Meta Capitals Limited and Cresttrademining Limited were also found to be ope as unregistered broker-dealers.
Pig butcher scams aren’t just running rampant in the United States either.
A recent investigation by the United Kingdom Bureau of Investigative Journalism on Jan. 29 found that of the 168 forex companies it considered to be engaging in fraudulent activity, about half of them had a linkage to pig butchering-like scams.