California regulator warns of 17 crypto websites suspected of fraud
The California Department of Financial Protection and Innovation (DFPI) has issued 17 separate warnings over two days to crypto brokers and websites it suspects are fraudulent.
The list includes 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, to name a few.
Additionally, there are two copycat sites posing as two big names in the crypto sector with eth-Wintermute.net and UniSwap LLC.
At the time of writing, DFPI’s consumer alert page has posted 17 warnings between December 27 and December 28 stating that these companies “appear to be engaging in fraud against California consumers.”
It is not common for DFPI to post so many alerts at once, suggesting that the number of crypto fraud reports may have increased in the latter stages of the year. DFPI usually posts sporadic warnings about company investigations, or alerts about certain incidents.
The last time DFPI sent out such a large set of crypto scam alerts was on June 15, when it sounded the alarm on 26 suspicious crypto platforms.
The warnings came in response to citizen complaints against brokers and websites, with the DFPI stating that individuals have reported losing anywhere from $2,000 to $1.2 million in certain cases. The DFPI however goes so far as to say that these websites “appear to be involved in fraud”.
A major alleged theme in most of these warnings relates to hog-slaughter scams, which involve an individual or group creating a fake online identity to create fake relationships or friendships through social media, messaging and dating apps .
In a hog slaughter or romance scam, a scammer would generally invest weeks or months in building the fake rapport to gain the victim’s trust, before gradually shifting the conversation to investments and luring them with “opportunities ” investment that are often too good to be true. .
After all, the ultimate goal is to get the victim to invest in crypto via a copycat version of a legitimate website – like UniSwap LLC and eth-Wintermute.net in this case – or by transferring funds to a dubious wallet address.
Accompanying the pig slaughter, the alleged fraudsters are said to have used another tactic described as the “Upfront Fee Scheme”, where bad actors will demand large sums of money to process fake withdrawals from their scam sites.
If the victim falls in love, the scammer not only pockets the initial investment, but an additional chunk on top, before immediately cutting off all forms of contact.
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“DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. To check whether an investment or financial service provider is licensed in California,” DFPI said.