Grand Canyon Times

The U.S. Department of Justice recently announced that it has seized more than $100 million worth of cryptocurrency from scammers. Binance, the world's largest cryptocurrency exchange, said the case is an example of how blockchain technology can be used to assist law enforcement in the decentralized finance industry in ways that aren't possible in the traditional finance industry.

Binance said in a tweet that the company "will continue to work closely with regulators and law enforcement to raise more awareness of scams including 'pig butchering' cases to protect users across the globe, and to help prevent more crime. We're very proud to have supported this significant case. It's a huge win for the FBI & demonstrates how the transparency of blockchain enables law enforcement to disrupt organized crime that can operate under the cloak of darkness in traditional finance." 

Judges in the District of Arizona, the Central District of California, and the District of Idaho authorized seizure warrants for six virtual accounts containing approximately $112 million worth of crypto tied to crypto investment scams, according to a news release. Court documents allege that the accounts were used to launder funds from schemes in which illicit actors cultivated relationships with victims and persuaded the victims to make investments in crypto exchanges. The exchanges were fraudulent, and the funds instead went to crypto accounts controlled by the scammers. The Phoenix Division of the FBI is investigating the case.

“Transnational criminal organizations are combining confidence scams with technological savvy to swindle Americans out of their hard-earned funds,” Assistant Attorney General Kenneth Polite, Jr. of the Justice Department’s Criminal Division said in the release. “These particularly vicious frauds – where scammers carefully cultivate relationships with their victims over time – have devastated families and cost individuals their life savings," Polite said the funds seized by law enforcement will be returned to the victims. He advised the public to "be wary of people you meet online; seriously question investment advice, especially about cryptocurrency, from people you have not met in person; and remember, investments that seem too good to be true, usually are.”

A pig butchering scam, also called a romance scam, refers to a scheme in which a fraudster develops a long-term relationship with a victim to build trust, typically through a social media platform or dating site. The scammer then convinces the victim to download an app or visit a website to make a crypto investment with the promise that the victim will make money, but the app or website is fraudulent, and the victim is eventually unable to withdraw his funds, according to TechTarget.

Binance has been proactive in ramping up efforts to combat cybercrime and prevent fraud, according to a December blog post on the company's website authored by Tigran Gambaryan, the global head of Intelligence and Investigations at Binance. 

Gambaryan, who previously worked as a Special Agent at the Internal Revenue Service-Criminal Investigation (IRS-CI) Cyber Crimes Unit for more than 10 years, shared a summary of the work Binance did throughout 2022 to combat financial cybercrime. He said Binance's compliance and security team, which grew in size by more than 500%, includes members who have previously worked for investigative organizations and law enforcement agencies around the world.

 Binance responded to more than 47,000 requests from law enforcement agencies between Nov. 2021 and Dec. 2022 with an average response time of three days, whereas many traditional financial institutions take months to respond to law enforcement requests. In working with law enforcement partners, Binance helped to recover millions of dollars and return the funds to the victims of cybercrimes. Through Binance’s Global Law Enforcement Training Program, the company held more than 70 workshops and training sessions to share knowledge and tools with law enforcement agencies and prosecutors to help them identify and combat cybercrimes. Gambaryan called the training program “truly the first of its kind, and a credit to the crypto industry when it comes to recognizing the importance of global security and compliance.”