GREENE — A Butler County man is asking the court to freeze accounts at a cryptocurrency exchange after he was allegedly bilked out of more than $119,000.
It’s one of the latest court actions in response to the burgeoning “pig butchering scams” that encourage victims to invest in digital currency through a bogus website and then to move the stolen money through digital accounts.
Attorneys for Michael Bullock of Greene said people behind the scam – a woman identified merely as ““Xin Jessica Li” and as many as 20 unidentified men – are likely from Turkey.
According to the suit, filed by attorney Joseph Casey last week in U.S. District Court in Cedar Rapids, the scam began in April when Jessica sent Bullock a Facebook friend request. They began communicating through the WhatsApp platform at her request and in the following weeks developed an apparent friendship, contacting each other on a regular basis.
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Jessica stated she was familiar with Iowa and planned to visit. She also said she was a successful amateur crypto trader.
“She further represented that her success was due to information leaked by her godmother, a purported insider and analyst at an options trading firm,” the lawsuit states.
She offered to teach Bullock, who had no experience with cryptocurrency, how to make money trading.
In July 2023, he opened an account at a crypto exchange and deposited a total of $120,000 in the following months from his checking account at a Charles City bank, records state. He also borrowed money and liquidated his 401k retirement account, putting the money into U.S. Dollar Coin.
Jessica then showed him how to undertake his own trades and options contracts using the Zaifint exchange, giving him step-by-step instructions. A Telegram messaging app was used to communicate with Zaifint staff.
Jessica also claimed she put $150,000 worth of crypto into a Zaifint account on Bullock’s behalf that he could later repay.
Jessica then walked him through how to move funds from his account to purported Zaifint addresses, according to the lawsuit. She showed him a display that claimed he made a hefty profit with the trades – about $917,000 – but in reality the funds went to addresses controlled by Jessica and others, records state.
“Zaifint did not and does not exist as a legitimate website, investment platform, or cryptocurrency exchange,” the suit states.
When Bullock attempted to withdraw his money, people claiming to be Zaifint staff threatened him and said they wouldn’t release the funds unless he supplied them with bank statements and other personal information and paid an additional $91,700.
Bullock’s attorney asked the court to prohibit the defendants from moving funds from the accounts.
Al Jazeera look at the arguments over regulating the crypto world.
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