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The US Securities and Exchange Commission (SEC) has recently brought a litigative and legal response by filing legal charges against three persons and five enterprises involved in the cryptocurrency ‘pig butchering’ fraud.
Pump and dump is a term used to describe a type of scams which feed on victims through a protracted process of misleading them into putting more and more of their money into an investment with the aim of eventually emptying the investment.&nbsp;
These cases represent a new episode in the continuing campaign fought by the SEC to make Americans safe from exotic crypto frauds.&nbsp; How the ‘Pig Butchering’ Fraud Unfolds&nbsp; 
Pig butchering is a very bizarre term, and yet it has a tendency of being a very frequent type of a scam in the cryptocurrency industry. In such cons, the attacker usually contacts the victim, either online, through social networks or dating sites or even via a phone call.
The scammers establish rapport and have continued interaction with the victims before setting up a fake securities that has something to do with digital currency. After the victims are ‘fed’ for investing large amounts of money, the scammers [disappear], embezzling the investors’ money.&nbsp;
The SEC’s case describes a number of such frauds planned by three people – to whom the agency attributed the status of core of the scheme’s participants – and five related companies. The commission postulated that the mentioned entities committed fraud against victims by offering fake investment solutions, with focus on cryptocurrencies.&nbsp; Contribution of the Companies Concerned&nbsp; 
Three U.S. residents, Jiajie Liu, 28, of Los Angeles, California; Fei Liao, 29, of San Gabriel, California; and Hua Zhao, 26, of Flushing, New York, are named in the SEC’s lawsuit against the purported cryptocurrency trading platform NanoBit. The lawsuit claims that participants in the scheme engaged in a coordinated scheme to defraud at least 18 investors of nearly $1 million in crypto assets and fiat currency.
All the five companies that are associated with these scams were said to have been formed with the intention of perpetrating frauds. It was credited for its role in giving the appearance of legitimacy to the operation including creating fake trading platforms that would pass off as real businesses to the victims. These platforms were to be used to portray false returns on investment in a bid the users be encouraged to invest more cash into the fraudulent scheme.&nbsp;
Besides, the people involved are also alleged to using high pressure tactics to defraud more individuals through these companies. Most of them used ‘romance scams’ or presented themselves as business personnel, combining physical communication with the fake crypto investment climate. SEC’s Expanded Effort against Crypto Fraud Schemes&nbsp; 
This is not the first time that the SEC has pursued the crypto-based fraudsters and it will not be the last either. Fraudsters engaging in the “pig butchering” scam are not an exception to many scammers who take advantage of the development of the cryptocurrency industry to harm people who do not have sufficient knowledge about investments or the whole process behind cryptocurrencies.&nbsp;
Such cases involve the SEC in such issues which are a clear indication that there is a need for more regulation in the crypto market. On one had, the cryptocurrencies offers people freedom from the regular finance systems but on the other hand they allow scammers to operate way beyond the legal systems usually used for the regulation of other forms of investments.&nbsp;
In the recent past, the SEC has stepped up efforts to police and oversee activities of cryptocurrencies and related products especially those involving scams. It still warns investors to exercise caution every time they plan to deal within the <a href="https://news.todayq.com/cthulhu-stealer-targets-cryptocurrency-wallets-in-mac-os/" rel="noopener noreferrer nofollow">Cryptocurrency</a> market through carrying out profound research.&nbsp; Possible Measures Investors Should Take to Avoid Pig Butchering&nbsp; 
In the case of the investors, the defense barrier being the awareness of the existing market trends. The SEC and other financial authorities also come up with a lot of materials that are designed to assist individuals who intend to invest from being swindled by the fraudsters. Some key warning signs include:&nbsp;
<ol class="wp-block-list">
 <li>Unsolicited Investment Opportunities: Basically, if a stranger is suddenly reaching out to you with an incredibly lucrative crypto investment offer, it is most probably a scam.&nbsp;</li>
 <li>Pressure to Invest Quickly: They include pretending to be hurry and pressuring you to invest because if you do not do it right now you will miss out on huge profits.&nbsp;</li>
 <li>Guaranteed Returns: In simpler terms, it is impossible to certify any investment let alone an investment such as cryptocurrency that has been volatile. No one should ever promise one can earn steady, predictable profits from investment since it is a warning sign.&nbsp;</li>
</ol>
Other than identifying these strategies, investors are advised to seek the help of licensed personnel and confirm the legitimacy of the online trading platform.&nbsp;
The case of SEC should hence be seen as a reminder that while cryptocurrency holds much promise, it is also laden with many dangers. Investors need to be careful especially where fraudsters are becoming more and more innovative in their operations.

SEC Files Pig Butchering Crypto Fraud Cases Against 3 People, 5 Firms

Todayq News

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