ASIC Shuts Down 95 Crypto Scam Companies, Protects $35.8 Million

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has been granted approval to shut down 95 companies suspected of engaging in crypto investment and romance scams, commonly known as “pig butchering.” The Federal Court of Australia approved ASIC’s application to wind up these companies on just and equitable grounds, following the discovery that most of these firms were incorporated with false information.

These companies, often masquerading as legitimate service providers, were found to be involved in deceptive practices aimed at defrauding their victims. ASIC Deputy Chair Sarah Court highlighted that these firms exhibited a common pattern of scam activity, particularly in the form of “pig butchering.” This scam involves building fake relationships with victims to gain their trust before convincing them to invest in fraudulent crypto or financial schemes.

Justice Angus Stewart, in an April 4 court ruling, reviewed 48 “Reviews of Misconduct” from 17 companies accused of facilitating romance scams. The judgment, made on March 21, underscored the need for stringent measures to combat such fraudulent activities. The regulator also suspects that much of this scam activity originates 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” had been received by the provisional liquidators, 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 to their name and recommended that the other 92 companies be wound up and immediately deregistered.

ASIC has been actively removing scam websites, with an average of 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 proactive approach aims to protect consumers from falling victim to these sophisticated scams, which often involve promises of high returns on crypto investments or emotional manipulation through romance baiting.

The shutdown of these 95 companies is a significant step in the ongoing battle against financial scams. It demonstrates ASIC’s resolve to protect consumers and uphold the standards of the financial market. As the threat from “hydra-like” scammers continues to evolve, ASIC’s actions serve as a reminder of the importance of consumer awareness and the need for continuous vigilance in the digital age. The regulator’s ability to take down over 130 scam websites each week underscores its commitment to combating fraudulent activities. This proactive approach not only helps in dismantling existing scams but also serves as a deterrent for potential fraudsters, making it clear that such activities will not be tolerated.