NY Real Estate Developer Alleges $3.6 Million Loss In Pig Butchering Crypto Scam; How to Stay Safe

A real estate developer from New York recently filed a federal lawsuit alleging that he lost over $3.6 million in an elaborate international crypto scam. Phillip Li named 20 individuals, businesses, and entities in the case filed in the Southern District of Texas, per Block Tribune. In the lawsuit, Li claims that he was defrauded through a bogus crypto trading platform called WDCEX.PRO in an elaborate pig butchering scam.

Here’s how the WDCEX pig butchering crypto scam unfolded

According to the complaint filed by Li’s attorney Marshal Hoda, an individual named Annie (whose real name is unknown) reached out to Li over WeChat (a Chinese instant messaging app) in July 2023 claiming to have found success with investing in cryptocurrency through the trading platform WDCEX.PRO. Over several months, Annie encouraged Li to open an account on the platform and make deposits. She assured him that he could make a profit through her claimed expertise and AI-powered trading tactics.

The suit alleges that Li wired a total of $3.65 million over 32 transactions to bank accounts based in Hong Kong that were provided by WDCEX customer service. The fake account statements of Li on the platform showed that he had balances in tens of millions. However, when Li attempted to make a withdrawal, he was prompted to pay “taxes” and “fees” by WDCEX. This is when Li realized that he had been a victim of a pig butchering scam allegedly orchestrated by a fraudster named Annie. According to Li’s complaint, the scam is part of a global criminal network that has defrauded investors out of over $75 billion since 2020.

The lawsuit has made claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act and seeks the return of all stolen funds. The complaint also seeks the court to impose a constructive trust over any assets determined to be wrongfully taken from Li.

Crypto and pig butchering scams are costing Americans billions of dollars

As per FBI data, losses from crypto investment scams in America reached $3.94 billion in 2023, an increase of 53% from $2.57 billion in 2022. The report suggests that crypto scams account for a large share of all online scams as losses from overall investment scams reached $12.5 billion in 2023. Furthermore, a new study conducted by the University of Texas faculty found that pig butchering scammers have likely stolen over $75 billion from victims globally. The study highlighted that over $15 billion in fraudulent funds had come from five exchanges, including Coinbase, and scammers most often converted them into Tether, a popular stablecoin, a TIME report noted.

Here’s how to avoid crypto scams

1. Never share private cryptocurrency keys or wallet access with anyone.

2. Ignore agents and firms that promise unbelievably high returns/profits.

3. Be wary of people impersonating "celebrities" promoting a crypto scheme.

4. Always meet people or any romantic interest in person before obliging their request for investment or money.

5. Read white papers, look up teams, and gain as much as information possible on a crypto platform before investing.

Here’s where to report scams

Victims of crypto scams can report incidents on the following portals:

Commodity Futures Trading Commission complaints and tips

FTC fraud report

Securities and Exchange Commission fraud reporting

FBI Internet Crime Complaint Center