A US federal judge found the CFTC had shown that Debiex, which marketed itself as a crypto platform, was actually a romance scam that stole around $2.3 million.
Crypto platform Debiex has been ordered to pay around $2.5 million after it failed to respond to a US Commodity Futures Trading Commission suit accusing it of being a romance scam ring.
Arizona federal court Judge Douglas Rayes on March 13 granted the CFTCs earlier motion for summary judgment in its case and ordered Debiex to pay back around $2.26 million it stole from its customers, along with a civil penalty of nearly $221,500.
Judge Rayes said there was no evidence that Debiexs failure to respond to the CFTC was the result of “excusable neglect.”
The CFTC sued Debiex in January 2024, saying its staff ran a so-called “pig butchering” scam, where they initiated romantic relationships with customers over social media to gain trust to convince them to invest in the platform.
The scheme hooked five victims who deposited around $2.3 million in total onto Debiex, which the purported trading platform stole, the CFTC said.
A highlighted excerpt of Judge Rayes‘ order summarizing the CFTC’s case against Debiex, Source: CourtListener
The CFTC also accused Zhāng Chéng Yáng of being a “money mule” for Debiex, whose crypto wallets were used to accept and steal victims funds.
Judge Rayes granted a CFTC motion for default judgment against Zhāng on March 12, finding it adequately alleged he controls a crypto wallet with OKX “that received digital assets to which he had no legitimate claim.”
He said OKX was “voluntarily preserving” the crypto in Zhāngs account and ordered its contents, consisting of $5.70 worth of Tether (USDT) and nearly 63 Ether (ETH) worth around $119,500, to be transferred to an unnamed victim.
The CFTC said in its January 2024 complaint that Debiexs scheme saw its unknown managers target potential victims through social media to lure them to websites it had created marketing itself as a “Blockchain Network Decentralized perpetual contract trading platform” where users can conduct futures trading and “Mining transactions.”
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Debiexs staff would present as females and built a rapport with victims through “continuous and repeated messaging and sharing purported pictures of themselves” while claiming to be “highly successful digital asset commodities traders,” the CFTC said.
Once an account was created and the customers sent over their crypto, the CFTC said Debiex would share “fictitious information” about customer balances, trading positions and profits.
“All of this information was most likely false,” the CFTC said. “The evidence shows that the Customers digital assets were simply sent to numerous digital asset wallets in an attempt to obfuscate their destination.”