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A US regulator opens its first pig butchering cases, a Cambodian senator is placed under US sanctions for allegedly profiting from crypto scams, and Tether hires a former PayPal staffer.
In a first for the agency, the US Securities and Exchange Commission (SEC) has this week filed two lawsuits against suspected pig butchering scammers.
It charged five entities and three individuals in connection with two relationship investment scams involving fake crypto-asset trading platforms.
The suspects behind the two platforms, CoinW6 and NanoBit, are alleged to have targeted US investors between 2022 and 2024.
According to the SEC, CoinW6 defrauded 11 investors out of more than $2.2m, and NanoBit defrauded at least 18 investors out of almost $1m.
Both schemes are said to have used tactics that are typical of pig butchering scams — long-term investment fraud in which victims are gradually persuaded to make larger and larger contributions.
The suspects contacted the investors via social media and gained their trust, before enticing them to part with their crypto-assets and subsequently disappearing.
CoinW6
The suspects behind CoinW6, a romance scam, contacted investors via social media platforms such as LinkedIn and Instagram, and then pursued romantic relationships with them over WhatsApp.
They adopted fictional online personas and purported to be managers of successful businesses, such as salons in New York and Los Angeles.
“The defendants depicted themselves as young, beautiful and rich on social media and in photos sent to investors,” the lawsuit notes.
“They often told investors that they were frustrated with dating and disappointed with their prior relationships.”
After developing a romantic relationship online, the suspects introduced the investors to crypto, claiming that they had made hundreds of thousands of dollars through crypto investment products offered by CoinW6.
CoinW6 promised 2 to 3 percent passive returns per day from crypto-asset staking, mining or yield farming products that the defendants purportedly operated.
“In fact, the CoinW6 platform and its products were entirely fictitious,” the lawsuit notes.
The defendants instructed investors on how to purchase crypto-assets, such as Tether and Ethereum, and how to invest those assets on CoinW6.
After investing, the defendants represented that the investors were earning “massive” daily returns, when in reality, the defendants had already misappropriated their crypto-assets.
A few months later, after the investors tried to withdraw their funds, the defendants would take down the fictitious platform and move the scheme to a new web domain.
NanoBit
In the NanoBit case, the defendants attracted investors by posing as financial industry professionals in WhatsApp groups, and gained their trust by providing advice about finance and investing.
They then encouraged the investors to put their money into the NanoBit platform, which, like CoinW6, gave the impression that the investors were trading real crypto-assets and making real money.
“But the NanoBit platform’s interface was a mirage,” the lawsuit notes. “In reality, no transactions took place on the NanoBit platform. When investors attempted to withdraw their profits, the defendants disappeared.”
NanoBit is said to have received around $725,000 in crypto-assets from investors, and a further $242,000 in fiat currency.
The individual defendants who received and misappropriated the fiat currency are referred to in the lawsuit as “money mules”. They are said to have spent the money in the US and wired it to Hong Kong.
All three individual defendants in the NanoBit case — Jiajie Liu, Fei Liao and Hua Zhao — are US citizens between the ages of 26 and 29.
US Treasury sanctions Cambodian tycoon over crypto scams
The US Office of Foreign Assets Control (OFAC), an arm of the Treasury, has sanctioned a Cambodian senator and businessman and several of his companies for suspected links to human trafficking and crypto scams.
Ly Yong Phat, 66, is the owner of the LYP Group, a major Cambodian conglomerate with interests in tobacco, electricity, casinos and tourism.
From 2022 to 2024, O-Smach Resort, a subsidiary of LYP Group, has been investigated by police for extensive human rights abuses connected to crypto scam operations.
According to the Treasury, victims of human trafficking report being lured to O-Smach Resort with false employment opportunities, having their phones and passports confiscated upon arrival, and being forced to work on scams.
Those who call for help report being beaten, abused with electric shocks, made to pay ransoms or threatened with being sold to another online scam gang.
There have been two reports of victims jumping to their death from buildings within O‑Smach Resort, the Treasury noted.
Local authorities have conducted repeated rescue missions at O-Smach Resort, including in October 2022 and March 2024, freeing victims of many nationalities, including Chinese, Indian, Indonesian, Malaysian, Singaporean, Thai and Vietnamese.
OFAC is designating Ly, LYP Group, and O-Smach Resort for being foreign persons who are responsible for or complicit in, or have directly or indirectly engaged in, serious human rights abuse.
OFAC is also designating Garden City Hotel, Koh Kong Resort and Phnom Penh Hotel for being owned or controlled by Ly, a sanctioned individual.
Tether hires former PayPal staffer
Finally, stablecoin issuer Tether has hired a former PayPal staffer as part of its compliance team.
This week, Tether named Jesse Spiro as its new head of government affairs, where he will be responsible for leading policy and engagement efforts with lawmakers, regulators and key stakeholders.
Spiro has more than six years’ experience in government and regulatory affairs within the blockchain space.
He joins Tether from PayPal, where he served as head of regulatory relations for the company’s blockchain and digital currencies business for the past three years.
Before his role at PayPal, Spiro served as the chief government affairs officer at blockchain analytics firm Chainalysis.
