Another Pig Butchering scam is in the news again. “Sha Zhu Pan” or “Pig Butchering” is a romance plot designed to fleece the funds of the unsuspecting. In this case, the Commodity Futures Trading Commission (CFTC) has filed an enforcement action against Cunwen Zhu and his California-based company Justby International Auctions alleging misappropriation of customer funds for digital asset and FOREX trading. This is the CFTCs first Pig Butchering scam.
Simultaneously, Zhu was charged in a criminal case with one count of wire fraud in the Middle District of Florida, United States of America v. Cunwen Zhu, for conduct similar to that alleged in the CFTC’s complaint.
The CFTC claims that the defendants, along with other individuals, sought to cultivate marks by creating a friendly or romantic relationship. Once they were on the hook, the pigs were slaughtered.
The target individuals were told funds received would be traded in digital asset commodity strategies and FOREX to generate returns. Instead, the CFTC alleges the funds were misappropriated, and Zhu used some of the funds for his personal use, and transferred the majority of the funds to bank accounts, digital wallets, and digital asset trading platforms under the control of other members of the fraudulent scheme.
The CFTC claims that no actual trading took place on behalf of customers.
The complaint alleges from approximately April 2021 through March 2022, Zhu and Justby accepted and misappropriated over $1.3 million from at least 29 customers as part of this scheme.
The CFTC is seeking restitution for 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.
CFTC Director of Enforcement Ian McGinley said the enforcement action is the first of its type for the CFTC, showing that the CFTC will hold unscrupulous individuals who defrauded customers accountable and protect the public from internet fraud.
