FBI Seizes Over $6M in Crypto from Southeast Asian Scam Targeting US Investors

The FBI has seized over $6 million in cryptocurrency tied to a fraud scheme operating out of Southeast Asia that targeted American investors. According to the FBI’s September 26 announcement, scammers deceived victims into believing they were investing in legitimate projects, causing significant financial harm over time.

FBI Assistant Director Chad Yarbrough emphasized the devastating impact of such crypto fraud schemes on US citizens, highlighting the importance of ongoing efforts to combat these operations. Yarbrough noted this seizure was one of the largest crypto-related seizures by the FBI this year.

The incident underscores the growing challenges in combating cryptocurrency fraud in an increasingly globalized market. Yarbrough stated that victims have lost millions, even taking out multiple mortgages on their homes in pursuit of perceived investment opportunities.

The scam employed a tactic known as “pig butchering,” where fraudsters build trust with targets over time before stealing their funds. Victims were convinced to transfer money from their bank accounts into crypto wallets and then onto fraudulent offshore platforms. To gain trust, scammers initially allowed limited withdrawals before cutting off access entirely.

This type of long-term investment fraud, also called Sha Zhu Pan, originated in China around 2016 and spread throughout Southeast Asia, particularly during the COVID-19 pandemic. Often, the scammers themselves are victims trafficked by organized crime groups.

Recent data indicates these schemes have become more prevalent, with 12% of Americans using dating apps reporting victimization in October 2023, up from 5% in 2018. The FBI warns that this fraud method poses a significant threat in the growing cryptocurrency space.