A group of major crypto firms, advocacy groups, and tech companies led by Coinbase has taken a stand against scams commonly seen throughout the industry.
Coinbase, along with Kraken, Gemini, Ripple Labs, Meta, the Global Anti-Scam Organization (GASO), and dating app company Match, recently announced the formation of a “Tech Against Scams” education and safety initiative.
Tech Against Scams aims to curtail the most prolific scams plaguing the industry by educating the public on various fraudulent schemes and outlining some of the best practices for avoiding becoming a victim.
In a press release, Coinbase noted “pig butchering” scams as one of the specific schemes the group hopes to combat.
Pig butchering is a long-term scam strategy where fraudsters spend ample time building rapport with their victims to build trust and “fatten” them up before finally stealing their hard-earned money.
Scammers often target victims through dating apps and use romance as an avenue to build trust. In other cases, the scammers initially approach their prospective victims with false promises and fraudulent business opportunities.
Coinbase stressed that these scams are not unique or inherent to the crypto industry or even digital technology and have existed long before either was invented.
The latest Crypto Crime Report from Chainalysis revealed that an estimated $5.9 billion was stolen via crypto-related scams in 2022, although the total number of illicit transactions represents only 0.34% of all crypto transactions globally, according to Coinbase.
Related: US authorities bust $73M crypto scam, make two arrests
More recently, Reuters reported that two individuals were charged by U.S. prosecutors for allegedly carrying out a crypto-focused pig butchering scam.
Yicheng Zhang and Daren Li were arrested by U.S. authorities in April for allegedly perpetrating the scheme that left $73 million drained from their victims.
The two reportedly funneled stolen digital assets, acquired by pitching fraudulent crypto investment opportunities, through 74 shell companies meant to obscure the fraudulent operation.
Each shell company was associated with a bank account that ultimately dumped the stolen funds into a bank account in the Bahamas.
Both suspects now face money laundering charges and a maximum sentence of 20 years behind bars if convicted.
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