Australian Authorities Shut Down 95 Crypto Scam Firms, Winding Up $35.8 Million in Claims

In a significant move to combat financial fraud, Australian authorities have shut down 95 firms linked to crypto investment and romance scams, commonly known as "pig butchering" scams. The Australian Securities and Investments Commission (ASIC) successfully applied to the Federal Court to wind up these companies, which were found to have been incorporated with false information and engaged in deceptive practices.

The court ruling, made on just and equitable grounds, highlighted a common pattern of scam activity where fraudsters build fake relationships with victims to gain their trust before convincing them to invest in fraudulent crypto or financial schemes. Justice Angus Stewart, in his ruling, reviewed 48 "Reviews of Misconduct" from 17 companies accused of facilitating these scams. The judgment underscored the severity and prevalence of these fraudulent activities.

ASIC Deputy Chair Sarah Court emphasized that many of these companies purported to offer genuine services but were actually scamming their victims. The regulator suspects that a significant portion 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" have 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, and the Philippines. The provisional liquidators found that only three of the 95 firms had assets to their name, recommending that the other 92 companies be wound up and immediately deregistered.

ASIC has been actively removing scam websites, taking down around 130 sites each week, bringing the total to over 10,000 sites. These 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 crackdown on these firms is part of a broader effort by Australian regulators to combat financial fraud and protect consumers from deceptive practices. The shutdown of these 95 companies sends a strong message to fraudsters and serves as a reminder to the public to be cautious when dealing with online investment opportunities. The regulator is currently shutting down about 130 scam websites per week, and has taken down over 10,000 sites in total, which include 7,200 fake investment sites and 1,500 phishing sites that target users unaware of the scams. Last month, ASIC began taking action against crypto ATM operators. It warned that operators who do not comply with Anti-Money Laundering and Counter-Terrorism Financing regulations could face penalties under the law. Australia’s financial crime agency AUSTRAC also reported a spike in suspicious activity linked to crypto ATMs and urged the regulation of crypto ATMs to tighten the safety of the sector.