{"id":9852,"date":"2025-03-17T08:05:39","date_gmt":"2025-03-17T07:05:39","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=9852"},"modified":"2025-03-17T08:05:39","modified_gmt":"2025-03-17T07:05:39","slug":"debiex-faces-2-5-million-penalty-in-cftcs-pig-butchering-lawsuit","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/17\/debiex-faces-2-5-million-penalty-in-cftcs-pig-butchering-lawsuit\/","title":{"rendered":"Debiex Faces $2.5 Million Penalty in CFTC’s ‘Pig Butchering’ Lawsuit"},"content":{"rendered":"

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The cryptocurrency platform Debiex has been mandated to remit approximately $2.5 million after neglecting to respond to a lawsuit from the US Commodity Futures Trading Commission, which alleged it operated as a romance scam operation.<\/p>\n

On March 13, federal court Judge Douglas Rayes approved<\/a> the CFTC\u2019s previous request for summary judgment in the case, directing Debiex to return about $2.26 million it misappropriated from<\/a> its clients, in addition to a civil fine nearly totaling $221,500.<\/p>\n

Judge Rayes remarked that there was no indication that Debiex\u2019s failure to engage with the CFTC stemmed from \u201cjustifiable oversight.\u201d<\/p>\n

The CFTC initiated legal action against Debiex<\/a> in January 2024, asserting that its employees operated a so-called \u201cpig butchering\u201d fraud<\/a>, where they developed romantic connections with clients via social media to gain trust and persuade them to invest in the platform.<\/p>\n

According to the CFTC, the operation ensnared five victims who collectively deposited about $2.3 million into Debiex, which the alleged trading platform subsequently misappropriated.<\/p>\n

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An excerpt from Judge Rayes\u2019 ruling summarizing the CFTC\u2019s allegations against Debiex, Source: <\/em>CourtListener<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

The CFTC additionally accused Zh\u0101ng Ch\u00e9ng Y\u00e1ng of acting as a \u201cmoney mule\u201d for Debiex, whose cryptocurrency wallets were utilized to receive and pilfer victims\u2019 funds.<\/p>\n

On March 12, Judge Rayes approved<\/a> a CFTC motion for default judgment against Zh\u0101ng, determining that it was sufficiently claimed he controlled a crypto wallet with OKX \u201cthat received digital assets with no legitimate right to them.\u201d<\/p>\n

He stated that OKX was \u201cvoluntarily holding\u201d the cryptocurrencies in Zh\u0101ng\u2019s account and ordered the transfer of its contents, which included $5.70 worth of Tether (USDT<\/a>) and nearly 63 Ether (ETH<\/a>) valued at approximately $119,500, to an unnamed victim.<\/p>\n

The CFTC asserted in its January 2024 complaint that Debiex\u2019s operation involved its unidentified overseers targeting prospective victims via social networks<\/a> to divert them to websites it set up, promoting itself as a \u201cBlockchain Network Decentralized perpetual contract trading platform\u201d where users could perform futures trading and \u201cMining transactions.\u201d<\/p>\n

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Employees of Debiex would impersonate females and establish a connection with victims through \u201congoing and repeated messaging, sharing alleged images of themselves\u201d while claiming to be \u201cextremely successful traders in digital asset commodities,\u201d according to the CFTC.<\/p>\n

Once a client created an account and transmitted their cryptocurrency, the CFTC stated that Debiex would disseminate \u201cfalse information\u201d regarding customer balances, trading positions, and profits.<\/p>\n

\u201cAll of this data was most likely fabricated,\u201d the CFTC asserted. \u201cThe evidence indicates that the Customers\u2019 digital assets were merely routed to numerous digital asset wallets to obscure their final destination.\u201d<\/p>\n

Magazine: <\/strong><\/em>SEC\u2019s reversal on crypto leaves crucial questions unanswered<\/strong><\/em><\/a>\u00a0<\/p>\n