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The U.S. Commodity Futures Trading Commission (CFTC) is stepping up its efforts to fight cryptocurrency fraud by forming partnerships aimed at educating the public on common scams in the digital asset space. The initiative will focus on raising awareness about long-term fraud schemes, such as “pig butchering,” which has seen a surge in victims recently.
In a statement released by the CFTC, the agency’s Office of Customer Outreach and Education (OCOE) announced it is collaborating with the American Bankers Association Foundation and the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy. These organizations will work together to protect investors from falling prey to increasingly sophisticated digital asset scams.
Pig Butchering Scams
“Pig butchering” scams, a form of relationship-based fraud, have become especially dangerous. In these schemes, scammers build trust with their victims over time, often posing as friends or romantic partners before convincing them to invest in fraudulent cryptocurrency platforms. Once the victim has invested, the scammer vanishes, leaving them with substantial financial losses. According to OCOE Director Melanie Devoe, these scams cost Americans billions of dollars annually.
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“Educating the public is our strongest defense against these fraudulent schemes. By partnering with federal and state regulators and consumer protection organizations, we hope to reach potential victims before it’s too late,” said Devoe. The new initiative seeks to inform investors about the warning signs of crypto scams and how to protect themselves from falling victim to fraudulent schemes.
SEC To Issue Investor Alerts
As part of this effort, the American Bankers Association Foundation will distribute infographics detailing how to spot and avoid pig butchering scams, highlighting the grooming tactics scammers use. Meanwhile, the SEC will issue investor alerts and educational materials to further spread awareness.
The crackdown on cryptocurrency scams comes at a time when both U.S. and global regulators are tightening their oversight of the crypto market. The CFTC and SEC have ramped up legal action against companies violating crypto regulations, while the FBI has warned of North Korean hacker groups targeting Bitcoin ETF issuers.
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A Rise in Crypto Scams
The rise in crypto-related fraud is not limited to the U.S. — global losses are mounting. In Australia alone, $122 million was lost to crypto scams over the past 12 months, according to the Australian Federal Police.
In May this year, several prominent companies including Coinbase and Kraken joined hands to address and prevent online frauds.
