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California Regulator Warns of 17 Crypto Websites Suspected of Fraud

The DFPI last issued such a large number of crypto scam alerts in June, when it warned about 26 suspect crypto platforms.

Over the course of two days, the California Department of Financial Protection and Innovation (DFPI) issued 17 separate warnings to cryptocurrency brokers and websites it suspects of being fraudulent.

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 are just a few of the companies on the list.

In addition, there are two forgeries posing as well-known names in the cryptocurrency industry: eth-Wintermute.net and UniSwap LLC.

At the time of writing, the DFPI’s consumer alert page had 17 warnings posted over the weekend of December 27 and 28, stating that these companies “appear to be engaged in fraud against California consumers.”

It is unusual for the DFPI to issue so many alerts at once, implying that the number of crypto scam reports may have increased in the latter stages of the year. The DFPI usually issues sporadic warnings about company investigations or alerts about specific incidents.

The DFPI last issued such a large number of crypto scam alerts on June 15, when it issued warnings about 26 suspect crypto platforms.

The warnings were issued in response to citizen complaints about the brokers and websites, with the DFPI stating that individuals have reported losses ranging from $2,000 to $1.2 million in some cases. The DFPI, on the other hand, only states that these websites “appears to be engaged in fraud.”

The majority of these warnings allege that pig-slaughtering scams involve an individual or group creating a fake identity online to build fake relationships or friendships via social media, messaging, and dating apps.

A fraudster would typically spend weeks or months building the fake kinship to gain the victim’s trust before gradually shifting the conversation toward investments and enticing them with investment “opportunities” that are frequently too good to be true.

The ultimate goal is to convince the victim to invest in cryptocurrency through a spoof version of a legitimate website in this case, UniSwap LLC and eth-Wintermute.net or by transferring funds to a shady wallet address.

Along with the pig slaughtering, the alleged scammers are said to have used another tactic known as the “Advance Fee Scheme,” in which the bad actors are said to have requested large sums of money to process fake withdrawals from their scam sites.

If the victim falls for it, the scammer not only keeps the initial investment, but also an additional slice, before cutting off all forms of contact.

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.