The U.S. District Court has received a civil file from The Commodity Futures Trading Commission against the Justby CEO and his company. The file alleged that the CEO Cunwen Zhu, a California resident, and his company Justby International Auctions (Justby) fraudulently misappropriated over $1.3 million in customer funds.
The funds according to CFTC were for digital asset commodity and forex trading. The Commission stated that it is its first case involving a romance scam, also known as “Pig Butchering or Sha Zhu Pan.”
Fraudsters engaging in this strategy first cultivate a friendly or romantic relationship with the potential customer where they are deceived with false information. Afterward, they solicit the customer to participate in a financial opportunity which is, in truth, a fraud.
The Director of Enforcement Ian McGinley mentioned that fraudsters took advantage of people wanting to escape the isolation of the pandemic, however, the action by the commission is an indication that it “will hold unscrupulous individuals who defrauded customers accountable and protect the public from internet fraud.”
As contained in the file, Zhu and his company between April 2021 through March 2022 engaged at least 29 customers in the scheme. He provided the customers with false trade records and didn’t carry out any actual trade.
Further, Zhu in the misappropriation of the funds used them for his gains. He as well transferred the majority of the funds to bank accounts, digital wallets, and digital asset trading platforms managed by his accomplices.
Ultimately, CFTC continues its litigation against Zhu and Justby, seeking “restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.”
The public is urged to be cautious in providing funds to an unregistered company and to verify a company’s registration with the CFTC before committing their funds.
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