CrestTradeMining Cease and Desist Order | Fox Market Trade Cease and Desist Order
Metacapitals Cease and Desist Order

NEWARK- Attorney General Matthew J. Platkin announced that the Bureau of Securities ordered three website operators involved in cyber scams to stop offering fraudulent cryptocurrency investments in violation of the New Jersey Securities Law. The Bureau urges New Jersey residents to beware of romance and cryptocurrency scams known as “pig butchering” — a common scheme where perpetrators essentially fatten victims up and then swindle them of all their funds.

“Pig butchering” scams begin when fraudsters, often using social media, contact victims, luring them into fraudulent cryptocurrency-investment schemes. The fraudsters gain the victim’s trust, often by starting a “romantic relationship” or a simple friendship to gain their victim’s trust. The fraudster then starts to convince the victim to invest in phony investments, before falsely claiming the initial investment grew significantly. The scammers then ask for more and more money, and as part of the scam demand multiple types of fees to withdraw the funds. Even when the victim pays the “withdrawal fees” the fraudsters do not refund the victim’s money.

“These scammers build up a sense of comradery between them and their victim—all to squeeze every cent they possibly can out of these people with promises of huge returns on investments,” said Attorney General Platkin. “We are working around the clock to protect the victims of these types of scams and to show these scammers our laws still apply in cyber space.”

“It is despicable for fraudsters to take advantage of people who are simply looking to invest in their future,” said Division of Consumer Affairs Acting Director Cari Fais. “With these enforcement actions, the Bureau is making it clear that it will pursue scammers who prey on people’s trust.”

The Bureau found that the online entities covered by today’s orders, Meta Capitals Limited, Cresttrademining Limited, and Forex Market Trade have engaged in fraud in connection with the offer and sales of securities on their websites by conduct that collectively includes:

• Omitting or misrepresenting that fees or charges would be imposed before investors could withdraw their funds;
• Omitting material facts to potential investors, such as the identity of their principals, how investors funds would be used, and the risks of their investment plans; and
• Posting bogus testimonials from clients that use stock photos and/or canned statements that appear on multiple cryptocurrency investment websites under different entity names.

The Bureau also found that all four entities have been violating the New Jersey Securities Law by offering and selling unregistered securities and that Meta Capitals Limited and Cresttrademining Limited have been acting as unregistered broker-dealers.

Pig butchering scams are rapidly becoming more popular in the U.S. with an estimated $429 million in losses in 2021. Unfortunately, New Jersey investors are not immune—the victims in these four cases were defrauded out of more than $100,000 in total.

“Even the savviest of investors can have a hard time recognizing fraud when it’s being perpetrated by someone for whom they have a romantic interest,” said Amy Kopleton, Chief of the Bureau of Securities. “This makes social media sites appealing to scammers as they know it is easier to scam someone who thinks they are in a relationship. To try to prevent New Jersey residents from becoming victims, the Bureau is raising public awareness of these schemes and educating investors on how to avoid scams.”

Some tips to avoid “pig butchering” scams include:

• Never respond to unsolicited messages from unknown contacts.
• Never send funds to or invest based solely on the recommendation of a social media relationship.
• Be wary of investments promising high returns with no-risk or guarantees.
• Watch out for platforms and domain names impersonating legitimate financial institutions.
• Never be rushed into an investment by the threat of a “limited time only” offer.
• Verify the identity of anyone who offers to sell you an investment and research the investment they are offering.

For information on how to prevent yourself from being a victim of an investment scam, general information on cryptocurrency investments, and to learn about being an informed investor visit the Bureau’s investor education page at https://www.njconsumeraffairs.gov/bos/Pages/investormaterials.aspx.

The Bureau’s investigation was handled by Supervising Investigator Rachel Glasgow and Investigator Meryl Griff Hubscher of the Bureau of Securities within the Division of Consumer Affairs.

The Bureau is charged with protecting investors from investment fraud and regulating the securities industry in New Jersey.  It is critical that investors “Check Before You Invest.”  Investors can obtain information, including the registration status and disciplinary history, of any financial professional doing business to or from New Jersey, by contacting the Bureau toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at (973) 504-3600, or by visiting the Bureau’s website at www.NJSecurities.gov.  Investors can also contact the Bureau for assistance or to raise issues or complaints about New Jersey-based financial professionals or investments.

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