Federal prosecutors in Los Angeles have reportedly confiscated virtual currencies worth $66.4 million. The seized assets are allegedly related to a “pig butchering” cryptocurrency fraud. In such schemes, scammers develop online relationships with victims to persuade them to pour funds into shady platforms.
The earnings from cryptocurrency frauds were laundered through virtual currency accounts in Los Angeles and other locations. Moreover, according to the DOJ (Department of Justice), the money that the victims sent for the investments were directed to cryptocurrency addresses under the control of the con artists and their allies.
A U.S. magistrate judge in Los Angeles gave the green light for the seizure of an account containing $66.4 million in various digital currencies. The approval came after concluding there was “probable cause” to believe the money came from wire fraud schemes.
The FBI has identified at least 10 victims who were unable to take out the money they invested in connection with the Los Angeles-based account confiscation. Furthermore, the latest cryptocurrency transfer was received by authorities on March 21. This is after they carried out the Los Angeles seizure warrant in December.
How do cryptocurrency pig butchering schemes work?
In schemes involving “pig butchering,” the victims are referred to as “pigs” by the con artists. This is so that victims will be “fattened up” into thinking they are in a romantic or other close personal relationship with the con artist. However, when the victim has developed enough trust, the con artist lures them into a crypto investment scheme.
The con artist created sites and mobile apps to show a fake financial portfolio with high returns. Additionally, this creates a sense of realism.
According to prosecutors, investment fraud had the largest loss total of any scam, totaling $3.31 billion. This is as per what the general public reported to the FBI’s Internet Crimes Complaint Center in 2022. Most of these scams involved cryptocurrency, including the pig butchering scheme. This type of scam increased by 183% from 2021 to $2.57 billion in reported losses last year, according to the officials.