The California Department of Financial Protection and Innovation (DFPI) issued 17 separate warnings to cryptocurrency brokers and websites over the course of two days, claiming that these companies “appear to be engaged in fraud against California consumers.”
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 among the crypto firms under investigation by the DFPI.
The regulator also targeted eth-Wintermute.net and UniSwap LLC, which are described as “two copycat sites posing as two big names in the crypto sector” in the report.
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 usually issues sporadic warnings about company investigations or alerts about specific incidents. The DFPI last released such a large number of crypto scam alerts on June 15, when it issued warnings about 26 suspect crypto platforms.
The 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, consumers may contact the Department for questions or inquiries, the DFPI stated.
A major element alleged in the majority of these warnings is pig-slaughtering scams, which involve an individual or group creating a fake identity online to build fake relationships or friendships via social media, messaging, and dating apps in order to gain the victim’s trust and get the victim to invest.
Along with pig slaughtering, the alleged scammers are said to have used another tactic known as the “Advance Fee Scheme,” in which the bad actors request large sums of money to process fake withdrawals from their scam sites. If the victim falls for it, the scammer keeps not only the initial investment but also an additional slice before cutting off all forms of contact.
