The New Jersey Bureau of Securities has ordered three website operators to stop luring victims seeking romance into their fraudulent cryptocurrency investment schemes.
The three companies affected by the cease and desist orders were Meta Capitals Limited, Cresttrademining Limited and Forex Market Trade. according to a Feb. 3 press release from New Jersey Attorney General Matthew Platkin.
All three companies claimed to be cryptocurrency trading platforms, where they would lure victims into copying the trades of their "expert traders" so that they can make huge profits.
These companies lure victims by contacting romance seekers on dating apps like Tinder through what is known as the "pig slaughter" scam.
Online scammers are taking advantage of investors in a new scam known as "pig slaughter" where victims are "fattened" before the scammers take as much as they can. With today's cease and desist orders, we are protecting NJ from cryptocurrency fraud. https://t.co/Q6xX5l4Ohk
— Attorney General Matt Platkin (@NewJerseyOAG) February 3, 2023
The “pig slaughter” is a scam in which cybercriminals use social media to contact victims, instigate a romantic relationship, and then lure them into a fraudulent cryptocurrency investment scheme once they have gained their trust.
Platkin said they are working hard to protect New Jersey residents who are lured into the investment scam:
“These scammers build a sense of camaraderie between themselves and their victims, all to squeeze every penny they can out of these people with promises of huge returns on investment.”
“We are working around the clock to protect victims of these types of scams and show these scammers that our laws still apply in cyberspace,” Platkin added.
Acting Director Cari Fais of the Bureau's Division of Consumer Affairs also hopes the enforcement actions will make it clear that they will "go after scammers who prey on people's trust."
The crackdown comes as the US Federal Bureau of Investigation (FBI) reported that some 4,300 victims lost a combined total of $429 million in 2021 alone to hog butchery scams. Statistics for 2022 have not yet been released.
Securities Bureau chief Amy Kopleton suggested that the butcher scam works well for scammers because their target audience is already in a position of vulnerability:
"Even the savviest investors can have a hard time recognizing fraud when it's perpetrated by someone they have a romantic interest in."
Related: Navigating the world of cryptocurrencies: tips to avoid scams
The companies affected by the cease and desist orders were also found to have violated New Jersey securities laws by offering and selling unregistered securities, the Bureau said.
On top of that, Meta Capitals Limited and Cresttrademining Limited were also found to be operating as unregistered stockbrokers.
Hog butcher scams aren't just rampant in the United States.
A recent investigation carried out on January 29 by the UK's Office of Investigative Journalism found that of the 168 forex companies that it found to be involved in fraudulent activity, about half of them had a link to similar pig-slaughtering scams.
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