CFTC's First Pig-Butchering Judgment! Fraudsters Ordered to Pay $5m and Receive Permanent Injunction

The U.S. Commodity Futures Trading Commission (CFTC) announced that the court issued a permanent injunction against Cunwen Zhu, a California resident who operated a Pig-Butchering scam, and his company, Justby International Auctions.

The CFTC stated that between April 2021 and March 2022, Zhu and his company obtained more than $1.35 million from approximately 29 customers through an elaborate "Pig-Butchering" scam.

Zhu promised his victims that he would use the funds to help them trade digital assets or forex on compliant platforms. In reality, he transferred most of the funds into bank accounts, digital wallets or digital asset trading platforms controlled by his accomplices and spent some of the funds on personal expenses. This scam did not involve any real trading on behalf of the client, and those trading platforms that were supposedly compliant were also manipulated by the accomplices. Moreover, the scammers falsified trading records in order to cover up the facts.

The Commission said that this is the first CFTC judgment for a Pig-Butchering scam.

Pig-butchering is also known as romance scams or "Sha Zhu Pan." In this type of scam, the scammer will intentionally approach the potential victim and use lies to become friends or romantically involved with the victim. After "fattening" the potential victim and building trust, the scammer lures them into participating in fraudulent financial investments.