![Don’t Fall Prey to Crypto “Money Mule” Scams](https://images.financemagnates.com/images/CFTC%20warns%20againts%20crypto%20in%20"money%20mulls"%20scams_id_cff6c4a7-faf2-4665-a3af-d1b13c1dfd6a_size900.jpeg)
The
Commodity Futures Trading Commission (CFTC) has issued a stark warning, including
cryptocurrencies, to students and young job seekers: beware of becoming an
unwitting “money mule.”
In a recent
advisory, the CFTC’s Office of Customer Education and Outreach (OCEO) cautioned
that criminal organizations target young people with seemingly easy,
stay-at-home job offers that involve moving money through bank accounts or
digital wallets.
Although
the CFTC’s warning primarily concerns the phenomenon of “money
mules,” it largely also pertains to cryptocurrencies. The agency suggests
that their decentralization and anonymity make them frequently used for
potentially illegal transactions.
“During
this year’s Money Mule Initiative campaign, the U.S. Department of Justice
reported that agencies took action against more than 3,000 money mules,
including criminal charges against 24 individuals,” CFTC stated in its
announcement.
According
to the CFTC description, unwitting individuals are asked to transfer funds
between cryptocurrencies or blockchains, helping criminals avoid detection and
exposing themselves to legal consequences.
“An
estimated $75 billion has moved through digital wallets connected to these
frauds,” noted CFTC, citing a University of Texas study. “Law
enforcement is getting better at tracing and seizing stolen assets on
blockchains, so criminals are motivated to ‘off-ramp’ or convert their tokens
to dollars, and may recruit unwitting accomplices to do so.”
How the Money Mule Scams
Work
The job
offers often appear straightforward – set up accounts, send or receive funds,
convert dollars to crypto-assets, or buy and deliver goods. In return, the
“employee” keeps a portion of the money. However, in reality,
transnational crime rings are using these unsuspecting individuals to obscure
the trail of funds obtained through fraud, human trafficking, drug sales, and
other crimes.
Besides
fake job postings, the CFTC warns that some may be roped in thinking they are
helping an online friend in need but are actually victims of “pig
butchering” – a type of romance or confidence scam used to fuel money
laundering networks. Common red flags include:
- “Off-ramping”:
Converting crypto-assets sent to your digital wallet into dollars to send
elsewhere - “On-ramping”:
Using cash to buy crypto, often at a Bitcoin ATM, to forward to another wallet - “Smurfing”:
Receiving a large sum of crypto and sending smaller amounts to multiple wallets
Steep Consequences for
Participants
While some
money mules are knowing accomplices, many are unaware they are facilitating
crime. But the CFTC underscores that participating in money laundering , even
unwittingly, can lead to criminal charges and destroyed trust in one’s
identity.
“Young
people looking for summer jobs may be just looking for part-time income and
could be attracted to offers that require being online a few hours a day,” said
Melanie Devoe, the director of OCEO. “Unfortunately, they could become
unwitting accomplices to money laundering or what the criminals call ‘money
mules,’ and that association could land them in jail.”
The CFTC
advises that if approached online to move money, immediately cease
communication. If you’ve already received funds from someone met online, notify
your bank and consider changing accounts. Most importantly, do not forward the
money and immediately alert the authorities, including filing reports with the
police.
Last month, the CFTC, together with federal prosecutors, took another crypto action and charged KuCoin and two of its founders with breaching anti-money laundering (AML) regulations. The charges state that KuCoin was functioning within the United States without the necessary registrations and did not uphold a sufficient AML program.
The
Commodity Futures Trading Commission (CFTC) has issued a stark warning, including
cryptocurrencies, to students and young job seekers: beware of becoming an
unwitting “money mule.”
In a recent
advisory, the CFTC’s Office of Customer Education and Outreach (OCEO) cautioned
that criminal organizations target young people with seemingly easy,
stay-at-home job offers that involve moving money through bank accounts or
digital wallets.
Although
the CFTC’s warning primarily concerns the phenomenon of “money
mules,” it largely also pertains to cryptocurrencies. The agency suggests
that their decentralization and anonymity make them frequently used for
potentially illegal transactions.
“During
this year’s Money Mule Initiative campaign, the U.S. Department of Justice
reported that agencies took action against more than 3,000 money mules,
including criminal charges against 24 individuals,” CFTC stated in its
announcement.
According
to the CFTC description, unwitting individuals are asked to transfer funds
between cryptocurrencies or blockchains, helping criminals avoid detection and
exposing themselves to legal consequences.
“An
estimated $75 billion has moved through digital wallets connected to these
frauds,” noted CFTC, citing a University of Texas study. “Law
enforcement is getting better at tracing and seizing stolen assets on
blockchains, so criminals are motivated to ‘off-ramp’ or convert their tokens
to dollars, and may recruit unwitting accomplices to do so.”
How the Money Mule Scams
Work
The job
offers often appear straightforward – set up accounts, send or receive funds,
convert dollars to crypto-assets, or buy and deliver goods. In return, the
“employee” keeps a portion of the money. However, in reality,
transnational crime rings are using these unsuspecting individuals to obscure
the trail of funds obtained through fraud, human trafficking, drug sales, and
other crimes.
Besides
fake job postings, the CFTC warns that some may be roped in thinking they are
helping an online friend in need but are actually victims of “pig
butchering” – a type of romance or confidence scam used to fuel money
laundering networks. Common red flags include:
- “Off-ramping”:
Converting crypto-assets sent to your digital wallet into dollars to send
elsewhere - “On-ramping”:
Using cash to buy crypto, often at a Bitcoin ATM, to forward to another wallet - “Smurfing”:
Receiving a large sum of crypto and sending smaller amounts to multiple wallets
Steep Consequences for
Participants
While some
money mules are knowing accomplices, many are unaware they are facilitating
crime. But the CFTC underscores that participating in money laundering , even
unwittingly, can lead to criminal charges and destroyed trust in one’s
identity.
“Young
people looking for summer jobs may be just looking for part-time income and
could be attracted to offers that require being online a few hours a day,” said
Melanie Devoe, the director of OCEO. “Unfortunately, they could become
unwitting accomplices to money laundering or what the criminals call ‘money
mules,’ and that association could land them in jail.”
The CFTC
advises that if approached online to move money, immediately cease
communication. If you’ve already received funds from someone met online, notify
your bank and consider changing accounts. Most importantly, do not forward the
money and immediately alert the authorities, including filing reports with the
police.
Last month, the CFTC, together with federal prosecutors, took another crypto action and charged KuCoin and two of its founders with breaching anti-money laundering (AML) regulations. The charges state that KuCoin was functioning within the United States without the necessary registrations and did not uphold a sufficient AML program.
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