CFTC charges man with fraud in pork butcher crypto-romance scam

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The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against a California man and his company for staging an elaborate romance scam that defrauded dozens of investors out of more than $1 million, according to a press release THURSDAY.

The suit, filed in the United States District Court for the Central District of California, alleges that Cunwen Zhu, a California businessman, deceived at least 29 clients out of more than $1.3 million allocated to the digital asset commodity and currency trading through his company, Justby International. Auctions, between April 2021 and March 2022. Instead of investing client funds in crypto and forex exchanges, Zhu collected the money for his personal use, transferring the majority of the funds to bank accounts, digital wallets and digital asset trading platforms controlled by those he employed in his alleged scheme.

Zhus’ partners cultivated romantic relationships with his alleged victims, fattening them with lies, before soliciting the client to participate in a fraudulent financial opportunity, the CFTC said in a statement. The romance scam, known as Pig Butchering, has become increasingly prevalent since the pandemic, with an increase in loneliness among people living on stay-at-home orders.

As people sought to escape pandemic isolation and connect with others online, fraudsters saw a new venue to prey on and take advantage of the public, the enforcement director says from the CFTC, Ian McGinley.

This isn’t the first time the CFTC has sounded the alarm over romance scams involving digital assets. The CFTC has published several customer protection fraud advisories and articles in recent months to deter users from falling for scams.

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