The rise of crypto-related crimes has compelled vital market players to explore ways to address the issue. On May 22, leading crypto exchanges, tech firms, and advocacy teamed up to combat crypto crime.
Coinbase, Kraken, Gemini, Meta, Ripple Labs, Match, and the Global Anti-Scam Organization (GASO) attended the meeting to deliberate on ways to mitigate online scams. The group agreed to form an alliance dubbed “Tech Against Scams” that will address unlawful activities in the financial sector.
Rise of Pig Butchering Scam
The “Tech Against Scams” alliance will provide education programs and run numerous safety initiatives to address crypto crime. The proposed education program will focus on online scams, fraudulent schemes, and ransomware attacks.
The training will educate the public on effective strategies to avoid falling into the scammer’s trap. The Coinbase team noted that the evolving financial landscape has exposed the public to multiple risks.
The report shows that $1.4 trillion is lost to financial scams yearly. This forced the alliance to take proactive measures to address the financial crime. The Coinbase team calls for a collaborative approach to address online scams.
The new alliance members must share valuable insights and expertise to create a safe and secure digital world. Each member must develop security measures to prevent scams and fraudulent schemes.
Role of ‘Tech Against Scams’ Coalition in Mitigating Pig Butchering Scam
The report illustrated that the Coinbase team would lead the “Tech Against Scams” alliance. The alliance will first tackle the pig butchering scam, which has become one of the famous investment frauds.
Coinbase believes that the partnership with key players in different industries will enhance the visibility of the alliance in mitigating crime. Also, the alliance will help develop best practices for addressing crypto crime.
A pig butchering scam is a unique approach criminals use to lure their potential victims to their fraudulent schemes by establishing romantic relationships. Criminals engaging in pig butchering scams invested their resources to build a strong rapport with the customers before stealing their hard-earned money.
The criminals launching pig butchering scams commonly use social media platforms and online dating applications to lure the victims to their scams. The scammers promise their potential victims to generate high profits from their fraudulent schemes.
In March, the US authorities confiscated assets worth $2.3 million from pig butchering scammers. The regulators plan to return the $2.3 million to the pig butchering victims.
The Coinbase team confessed that such scams have been in existence even before the inception of crypto assets and digital technology.
Law Enforcers Teams Up to Address Crypto Scams
Reviewing the Crypto Crime Report by Chainalysis, around $5.9 billion was lost in crypto scams in 2022. The Chainalysis report demonstrated that with the changes in the financial sectors, scammers are advancing their skills to steal customers’ funds.
A recent recent report from security experts shows that scammers are leveraging the power of artificial intelligence (AI) to conduct untraceable crimes. The prevalent use of AI in criminal activities aims at concealing the scam to the law enforcers.
According “Global Financial Fraud Assessment report ” by Interpol, the regulators noted that the growing adoption of emerging technologies has enabled notorious illicit groups to engage in illegal activities.
The ‘Tech Against Scams’ alliance comes when the global law enforcers are taking legal action against pig butchering scammers. According to Reuters, the US Department of Justice arrested two Chinese nationals, Yicheng Zhang and Daren Li, for running one of the largest pig butchering scams.
The two suspects are charged with money laundering and defrauding customers of over $73 million. The prosecutors noted that Zhang and Li transferred the multimillion dollars through shell companies to conceal their unlawful activities.
Also, some of the stolen funds were converted to Tether stablecoin USDT. The DOJ argued that if the two suspects are found guilty of money laundering, they will receive a 20-year imprisonment.
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