ASIC Shuts Down 95 Crypto Scam Companies, Claims Top $35.8 Million

The Australian Securities and Investments Commission (ASIC) has been granted approval by the Federal Court of Australia to shut down 95 companies suspected of involvement in crypto investment and romance scams, commonly known as "pig butchering." The court's decision was based on just and equitable grounds, following ASIC's discovery that most of these companies were incorporated with false information. The court reviewed 48 "Reviews of Misconduct" from 17 companies accused of facilitating romance scams, with Justice Angus Stewart noting a common pattern of scam activity.

These companies were found to be operating under the guise of providing genuine services, but in reality, they were scamming their victims. The scams involved building fake relationships with victims to gain their trust before convincing them to invest in fraudulent crypto or financial schemes. ASIC Deputy Chair Sarah Court highlighted the deceptive nature of these operations, emphasizing the need for vigilance among consumers.

The scam activity is believed to originate largely from Southeast Asia. Insolvency and restructuring advisers Catherine Conneely and Thomas Birch of Cor Cordis have been appointed as joint liquidators of the 95 companies. Nearly 1,500 claims by "investors" have been received, amounting to total claims of over $35.8 million. The claimants are based in various countries, including Australia, the US, Cameroon, Ghana, India, Nepal, the Philippines, and France. The provisional liquidators found that only three of the 95 firms had assets, recommending that the other 92 companies be wound up and immediately deregistered.

ASIC has been actively removing scam websites, with around 130 sites taken down each week, bringing the total to over 10,000. These sites include over 7,200 fake investment platform scams and 1,564 phishing scams. Despite these efforts, ASIC warns that the threat of scams and identity fraud remains high, urging consumers to stay vigilant. The regulator's actions underscore the persistent and evolving nature of these scams, which are often compared to the mythical hydra, where shutting down one scam operation leads to the emergence of others.

The recent crackdown by ASIC is part of a broader effort to combat financial fraud and protect consumers from deceptive practices. The regulator's proactive measures, including the shutdown of these companies and the removal of scam websites, demonstrate a commitment to maintaining the integrity of the financial market. However, the ongoing nature of these scams highlights the need for continued vigilance and education among consumers to prevent falling victim to such schemes.