CFTC accuses crypto platform Debiex of $2,3 million in fraud

The company’s managers appropriated the funds of the clients transferred to the trust management

22.01.2024 - 10:42

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3 min

What’s new? The US Commodity Futures Trading Commission (CFTC) has charged digital asset platform Debiex with fraud. Unidentified individuals associated with the platform “cultivated friendly or romantic relationships with potential customers,” lied to gain trust, and then asked to open and fund trading accounts on the platform, the CFTC said in a statement. Since March 2022, five victims have been identified with total losses of about $2,3 million.

The CFTC’s statement

What else is known? The CFTC said the crypto platform targeted Asian Americans and contacted customers via social media to get them to open and fund trading accounts. Instead of using assets on behalf of users, Debiex misappropriated funds.

“The Debiex websites merely mimicked the features of a legitimate live trading platform and the ‘trading accounts’ on the websites were a complete ruse. No actual trading took place on the customers’ behalf,” the CFTC said.

The CFTC has filed a civil action against Debiex in the US District Court for the District of Arizona. Officials are seeking damages, compensatory and monetary penalties, and a trading ban.

The lawsuit names Zhang Cheng Yang, whose crypto wallet was used to store the misappropriated funds, as a defendant for damages.

CFTC proposes to require crypto exchanges to segregate their own and client assets

The initiative is designed to prevent situations similar to the FTX collapse

Earlier, the US Internal Revenue Service compiled its own ranking of the agency’s most high-profile cases for 2023, in which crypto scammers took 4 out of 10 positions. The list included the hacking of the Silk Road darknet marketplace and the collapse of the OneCoin crypto pyramid scheme.

In January, Taiwan police arrested David Pan, the founder of the local crypto exchange Ace Exchange, on suspicion of fraud involving digital assets worth 200 million Taiwanese dollars ($6,4 million).

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