Debiex ordered to pay $2.5M in CFTC romance scam case

A U.S. federal judge has ruled against cryptocurrency platform Debiex in a case brought by the Commodity Futures Trading Commission (CFTC), ordering the company to pay $2.5 million in restitution and penalties.

The judgment, issued on March 13 by Judge Douglas Rayes in Arizona, follows allegations that Debiex operated a "pig butchering" romance scam, defrauding victims of approximately $2.3 million.

The CFTC’s lawsuit, filed in January 2024, accused Debiex of targeting victims through social media by establishing romantic or friendly relationships to gain trust.

Once trust was established, the platform encouraged victims to invest in what it falsely marketed as a legitimate trading platform for digital asset commodities.

Instead of conducting actual trades, Debiex misappropriated customer funds and provided fabricated account information about balances and profits.

The scheme primarily affected five victims, who collectively deposited $2.3 million into accounts controlled by Debiex.

The funds were later dispersed across multiple digital wallets to obscure their final destinations.

The court also found that Zhāng Chéng Yáng, identified as a "money mule," used his crypto wallet to facilitate the fraud.

Judge Rayes ordered the transfer of approximately $119,500 worth of Ether (CRYPTO:ETH) and $5.70 in Tether (CRYPTO:USDT) from Zhāng’s wallet to one of the victims.

Debiex failed to respond to the CFTC’s suit, and the court determined there was no “excusable neglect” for its absence.

As a result, Judge Rayes granted a summary judgment in favor of the CFTC, requiring Debiex to repay $2.26 million in stolen funds and an additional $221,500 as a civil penalty.

The CFTC highlighted that the fraudulent activities began in March 2022 and involved deceptive tactics such as impersonating successful traders and using fake trading platforms.

The regulator has also issued warnings about the growing prevalence of romance scams targeting cryptocurrency investors.