US to return $7M to victims of ‘spoofed’ crypto investment websites

The U.S. government has announced plans to return $7 million to victims of a sophisticated crypto investment scam.

Fraudsters used social engineering tactics to gain victims' trust and directed them to fake websites mimicking legitimate crypto investment platforms.

These sites falsely displayed profits to encourage further deposits, but when victims attempted withdrawals, they were coerced into sending additional funds under the guise of tax payments on their supposed earnings.

The stolen funds were funneled through over 75 bank accounts linked to shell companies and laundered overseas.

In June 2023, the U.S. Secret Service seized a portion of these funds from a foreign bank and initiated civil forfeiture proceedings. A legal settlement allowed the recovery of $7 million for distribution to victims.

Authorities are urging victims to contact the Secret Service to claim their share of the recovered funds. This case highlights growing threats in the crypto market, where scammers exploit fake platforms and complex laundering schemes.

To avoid falling victim to crypto and other investment scams, investors can verify that the broker or investment firm is licensed and registered with regulatory authorities such as the SEC or FINRA (via tools like BrokerCheck), use resources like the SEC’s EDGAR database to research the company’s financials and ensure the investment is legitimate, and check official regulatory websites to confirm the legitimacy of websites and firms, as scammers often impersonate real companies.

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