Crypto scam spoofing former Singapore-based exchange cheats 5 US investors of $13.8m

Crypto scams had increased by 335 per cent in the first half of 2022 from the same period in 2021. PHOTO: REUTERS

SINGAPORE - Five victims in the United States have lost more than US$10 million (S$13.8 million) in a cryptocurrency scam that involved spoofed domains of the former Singapore International Monetary Exchange (Simex).

On Monday, the US Department of Justice (DOJ) said that between May and August, scammers lured the victims into participating in a cryptocurrency scam where they invested in fraudulent platforms, only for their funds to be siphoned away into private wallets. 

To convince the victims that they were investing in a legitimate cryptocurrency opportunity, the scammers created seven fake domains of the former Simex, which was merged with two other companies in 1999 to form the Singapore Exchange (SGX).

In response to queries from The Straits Times, an SGX spokesman said that since the merger, Simex has not operated under its name.

The spokesman added: “SGX Group does not operate any investment platform, including a platform for individuals to trade crypto-products or any other investment product.

“Investors can access SGX-listed products only via a licensed broker which will have its own investment platform. As such, SGX also does not directly accept monies for the purpose of investment and so will not ask for such funds.”

A court in the US state of Virginia has authorised the seizure of these domains, the DOJ said.

Fraudsters or hackers use these domains to create websites that appear to belong to a trusted company when they in fact link the user to a fake website controlled by cyber criminals.

The DOJ said the victims would first encounter the scammers on dating applications or social media websites. Sometimes, the scammers would introduce themselves after sending a text message that they claimed to have sent to the wrong number.

“Scammers initiate relationships and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency,” the DOJ added.

“Victims are then... persuaded to invest money. Once the money is sent to the fake investment app, the scammer vanishes, taking all the money... often resulting in significant losses for the victim.”

To conceal the sources of the funds they have received, the scammers transfer them at once through multiple private wallets. 

During the Global Anti Scam Summit earlier in November, Mr Camill Cebulla, the European sales director of Singapore-based cyber-security company Group-IB, said crypto scams had increased by 335 per cent worldwide in the first half of 2022 from the same period in 2021. In 2021, about US$55.3 billion was lost to all scams worldwide, according to a study by non-profit organisation Global Anti-Scam Alliance and data service provider ScamAdviser.

The DOJ advised victims of such scams to file a report with the US Secret Service.

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