Australia has recently intensified its crackdown on 95 firms believed to be involved in crypto investment and romance scams, disguising their activities as legitimate enterprises.
In its most recent action targeting cryptocurrency-related crimes, the Australian Securities and Investments Commission announced on April 8 that the Federal Court approved its bid to shut down these companies.
The commission revealed that the court agreed to dissolve them on grounds of fairness, with ASIC discovering that many were registered with false information.
The regulatory body suspects these companies were part of a larger scheme, specifically linked to “pig butchering” tactics, where fraudsters cultivate fake online relationships to gain their victims’ trust before leading them into investments on bogus crypto platforms.
Justice Angus Stewart, who oversaw the proceedings, characterized the argument for shutting down the companies as “overwhelming,” noting that there was a justified lack of trust in their operations and management.
A ruling on March 21 that examined 17 firms from this group uncovered a noticeable trend of pig butchering scams associated with misleading websites and applications.
The Federal Court appointed Catherine Conneely and Thomas Birch from Cor Cordis as joint liquidators for the 95 firms. During their preliminary investigation, they determined that only three had any assets, which led to a recommendation for the immediate deregistration of the other 92.
The liquidators have since gathered nearly 1,500 claims from purported victims spread across 14 countries, including Australia, the United States, Cameroon, Ghana, India, Nepal, the Philippines, and France. Total reported losses surpass $35.8 million.
ASIC believes that many of the websites and mobile applications connected to these firms were crafted to resemble genuine trading platforms, misleading users into thinking their funds were being properly managed. In reality, these platforms were fictitious, siphoning victims’ money into accounts controlled by the perpetrators.
“These companies were created with the intent of presenting a facade of legitimacy,” warned ASIC Deputy Chair Sarah Court, emphasizing that “scammers will deploy every method possible to steal individuals’ money and personal data.”
ASIC has been vigorously addressing such fraud, reportedly shutting down approximately 130 scam websites each week. To date, the agency claims to have dismantled over 10,000 malicious sites, including more than 7,200 fraudulent investment platforms and 1,500 phishing schemes.
Last month, the agency also took action against crypto ATM operators, cautioning that those who do not adhere to anti-money laundering regulations could face legal repercussions. AUSTRAC has noted an uptick in suspicious transactions and scams connected to these machines, urging stricter regulation of Australia’s crypto ATM network.