CFTC Files Lawsuit Against Debiex Over $2.3 Million Romance Scam

The US Commodity Futures Trading Commission (CFTC) is filing charges against crypto exchange Debiex over allegations of a $2.3 million romance scam. The US regulator announced this civil lawsuit on January 19 after filing for an enforcement action in the US District Court for the District of Arizona. 

Debiex Alleged Romance Scam Explained

According to the CFTC’s statement, Debiex presented itself as a crypto exchange that offered US citizens access to digital assets trading features. However, the entire set-up was a ruse targeted at ripping Asian Americans of their investments using the blueprint of a romance scam. 

The CFTC describes Debiex’s operations as a “sophisticated fraudulent scheme” that involved three groups of actors. These included “solicitors,” who were individuals who established contacts with potential victims via a US-based social media platform. 

In a similar fashion as most romance scams, these “solicitors” gained the trust of their victims by “befriending or romancing” them before urging them to open an active trading account with Debiex. A statement from the Commission’s announcement read:

The CFTC’s complaint alleges Debiex’s unidentified officers and/or managers cultivated friendly or romantic relationships with potential customers by communicating falsehoods to gain trust and then solicited them to open and fund trading accounts with Debiex. 

The second set of actors involved in Debiex’s scam were the “customer service,” which were supposedly employed to manage trading accounts for the exchange’s customers. “Money mules” represent the last and most important group in Debiex’s purported lavish scam. This set of people provided digital wallets, which were utilized by the crypto exchange to receive and misappropriate users’ funds. 

According to the CTFC’s announcement, one of these potential mules goes by the name Zhang Chéng Yáng (Zhang), whose digital wallet was used to embezzle funds belonging to at least one customer. 

CFTC Targets Multiple Penalties Against Crypto Exchange

Through an elaborate romance scam, the CFTC alleges that Debiex was able to defraud five Asian Americans for a total of $2.3 million. 

The US regulator has now approached the court seeking compensation for all victims and recovery of all “ill-gotten gains” by the crypto exchange. The Commission will also be looking to impose fines and trading restrictions as well as secure a court order that prevents the exchange from future violations of CFTC regulations and the Commodity Exchange Act (CEA). 

In other news, Bitcoin has now gained by 1.1% in the past day, attaining a value of $41,590. However, the crypto market leader still leaves much to be desired on the larger scale with a decline of 2.9% and 5.2% on the seven and 14-day chart, respectively.

BTC trading at $41,601 on the daily chart | Source: BTCUSDT chart on Tradingview.com

Featured image from CNC Intelligence, chart from Tradingview