Delaware Investor Protection Unit issues cease and desist over cryptocurrency scam


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 a cryptocurrency scam, Attorney General Kathy Jennings announced Wednesday.

Known as the “pig butchering scam,” victims 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 absconding with their assets (“butchering”).

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

The Department’s Investor Protection Unit received complaints from Delawareans who were contacted online by unknown persons who urged them to purchase cryptocurrency for investments. After purchasing some crypto and seeing large returns on their initial investments, the victims were encouraged to invest more.

Ultimately, they were never able to withdraw the funds and their cryptocurrency disappeared.  It is estimated that this international scam involves thousands of victims across the country with losses into the billions of dollars.

With the help of a data analytics company, the Investor Protection Unit traced cryptocurrency belonging to two Delaware complainants to a number of virtual wallets on various crypto exchanges. The summary order prohibits the persons and entities affiliated with the wallets from withdrawing or moving assets owned by the complainants.

This prevents the crypto exchanges holding the wallets from moving the fraudulently obtained crypto, effectively freezing the accounts holding assets belonging to the victims.

Be wary of someone you don’t know contacting you through any virtual platform looking to engage in frequent conversations.