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Cayman’s crypto crime wave

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International crime lords are targeting Cayman Islands residents (File photograph)

Cayman residents have been conned out of millions of dollars through a “pig butchering” scam, as crypto criminals target the Caribbean Island.

Authorities are warning the schemes are so sophisticated, no one is safe.

A new, specialised Cayman law enforcement unit put in place to investigate offshore business-related crime has received dozens of reports and complaints from Cayman residents as well as from people overseas involved in crypto companies registered there.

The Cayman Islands Bureau of Financial Investigation was created to meet international pressure for the island to be more proactive in fighting global financial crime.

They are now warning that victims in the Cayman Islands are being specifically targeted in a sophisticated scam operated by outside criminal groups.

In fact, investigators suspect there are even more victims who haven’t reported being conned, for one reason or another.

The Cayman Islands Bureau of Financial Investigation has received dozens of reports from Cayman residents as well as from people overseas involved in crypto companies registered here that they had been conned out of millions of dollars through what is commonly known as “pig butchering”.

The CIBFI told the Cayman News Service that while such criminals have global victims, the numbers in Cayman seem to be higher proportionately. They presumed it related to the island’s crypto business and large number of wealthy people.

Just this week, the Royal Cayman Island Police Service raised alarm with fresh warnings for Cayman residents.

The Cayman Islands Bureau of Financial Investigation has issued a warning over sophisticated scammers (File photograph)

CNS said on average Cayman Islands victims have lost between CI$50,000 (1KYD=US$1.20) and CI$150,000, with some losing more than a million dollars.

They quoted the CIBFI: “The scam is a type of fraud in which criminals lure victims into digital relationships to build trust before convincing them to invest in cryptocurrency platforms.

“Unbeknown to victims, the fraudsters control the platforms and will eventually take all the money and vanish.”

The scams are usually perpetrated over a long period of time, and combine elements of romance scams, investment schemes and cryptocurrency fraud.

The fraudsters build some form of relationship with their victims — metaphorically fattening the pig.

They then deceive them into making investments in fake business ventures and take every penny — the butchering.

Most victims are between 30 and 60, though recently retired people have also been sucked into the scams, police said.

Even police officers, those familiar with investment products, graduate students, engineers, consultant doctors and those working in the virtual currency space have been caught out by these criminals.

“Unlike the stereotypical scam victim, many of them are highly educated and digitally savvy,” the CIFBI officers said.

Unfortunately, very few victims have been able to get any money back. The criminals use a third-party money-laundering service to obfuscate and hide the stolen funds within a huge and sophisticated network, turning over billions of dollars before being cashed out, usually to Chinese crime syndicates operating in South East Asia.

The team of 11 experts in the CIBFI includes specialists with experience in Cayman, the UK, Jamaica, Trinidad & Tobago and Sweden after an international recruitment campaign to find accredited financial investigators, police and civilian professionals and financial analysts, as well as a specialist investigator in cryptocurrency transactions.

They collaborate with Interpol and Europol, utilising advanced law-enforcement techniques in the investigation of complex, cross-border financial crimes, while conducting proactive analysis of intelligence alongside financial transactions.

Working with the Financial Reporting Authority, which has effectively worked as a clearing house for reports about suspicious financial activity but does not investigate, the bureau collaborates between industry and law enforcement as it goes after sophisticated organised crime, filling a longstanding hole in Cayman’s fight against financial crime.

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Published August 11, 2023 at 8:00 am (Updated August 12, 2023 at 8:07 am)

Cayman’s crypto crime wave

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