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The mobile app posted a profit of $2.8 million on a hot day of trading on the Singapore Stock Exchange. But every time the trader tried to withdraw funds in the U.S., he was confronted by customer service representatives demanding mysteriously high tax payments or fees, according to court documents.

US officials say it’s a new and sophisticated scam that is taking millions of dollars from people who let their guard down online. Far from making $2.8 million, the trader invested $9.6 million in the platform this year before it all disappeared, according to court documents.

In a November lawsuit, the Secret Service said five U.S. victims said they were tricked into investing large sums of money in cryptocurrency this year by scammers who created seven identical domains to spoof the website of the Singapore International Currency Exchange. Fraudsters have also created a smartphone app mimicking what merchants use on legitimate platforms, officials said.

One victim in Richmond lost $289,000 as part of the website seizure last month, according to a ruling filed in federal court for the Eastern District of Virginia. Another, in Los Angeles, drained more than $200,000. A trader in Redmond, Wash., who thought he made $2.8 million in a single day in July, said his account showed a total profit of about $7 million.

But the “trade profits” shown on his app were an illusion, according to US officials.

“After multiple attempts to withdraw their investment, they were unable to recover any portion of their cryptocurrency investment,” a Secret Service agent told the court in November.

Investigators are calling it a “pig slaughter” scheme. Scammers find targets on dating apps, social media, or through text messages sent to a “wrong number.” They build relationships with targets and slowly gain their trust, eventually leading to the possibility of cryptocurrency investment. When money is sent to a fake investment app, the scammer disappears with the funds.

The former policeman fell for Alice. Then she fell for his $66 million crypto scam.

Jason Kane, Assistant Deputy Director of the US Secret Service’s Bureau of Investigation, called it “the next generation of long-winded cheats.”

“The American public needs to be aware of the dedication these criminals have in defrauding people of their hard-earned money,” Kaine said in a statement. “Fraudsters can identify their victims and get them to invest by offering so-called returns on investment to demand further investment. The public should be vigilant in their online activities, being aware of who they are interacting with and being suspicious of fundraising from an unknown source.”

The FBI said the scam originated in China in late 2019. But by 2021, the FBI’s Internet Crime Complaint Center received more than 4,300 complaints a year related to crypto-romance scams, resulting in more than $429 million in losses.

“Scammers use translation software to communicate seamlessly with their victims,” ​​the FBI said in a statement. “The victims have very similar stories. by meeting someone on a dating app, the scammer gains the victim’s trust and confidence, then claims to have knowledge of cryptocurrency investment or trading opportunities that will lead to substantial profits. The victim is then directed to transfer large amounts of cryptocurrency from the exchange account to cryptocurrency wallets controlled by the fraudsters, ultimately losing it all.”

A saleswoman in Washington state said she communicated with the scammers through LINE, a Japanese chat app, and WeChat, a Chinese app. The warrant application does not describe how they met.

His first investment was $400, authorities said, but days later he poured another $100,000 into the platform and lost a total of $9.6 million. He said “customer service representatives” would ask for “taxes” or “fees” when he tried to withdraw funds from his account, according to the warrant application.

In May, a Singapore fake exchange representative told a trader that “Under the Financial Income Tax Act, if the total profit for the day exceeds 100% of the principal amount of the transaction, you must pay 30.6% of the profit amount. in terms of personal income tax,” US officials said. That meant paying another $570,384 in taxes, according to court records.

“Please pay as soon as possible, we will deduct the tax for you after payment, thank you.” the representative said.

After the trader made the alleged income tax payments and tried to withdraw the funds, he was told the following month that he had “received 33 abnormal” bitcoins and “your account now belongs to the abnormal state… you have to pay 33 BTC as security. deposit to ensure that you are not involved in any illegal conduct,” the warrant application said.

That’s when the seller “determined it was a scam and stopped investing,” according to court records.

US officials said the investigation into Singapore’s fraudulent exchange is ongoing. Federal prosecutors have not released the names of the suspects. Officials say people who believe they may be victims of cryptocurrency fraud should contact [email protected] or visit IC3.gov to file a report.

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