- Chen stole and fraudulently wired $520,000 from a victim’s bank account
- He then opened an account in their name at Bitstamp crypto exchange
- 72.5% of the funds looted in scams is not recovered
37-year-old Xiaofei Chen from Sugar Land, Texas pled guilty to aggravated identity theft linked to a crypto scam. It incurred damages of more than half a million dollars, the Houston Public Media reported, citing information from the United States Attorney’s Office.
He opened a fake Bitstamp account
Chen admitted to stealing and fraudulently wiring $520,000 from a victim’s bank account. After that, he opened an account in their name at Bitstamp crypto exchange, the office announced last week. He awaits sentencing in January next year.
Chen is also accused of using the victim’s name and driver’s license without their consent or knowledge. The least possible time he faces is two years in prison sentence, according to the office. He was released on bond by US District Judge Alfred Bennett and will remain on bond until his trial.
Rate of fund recovery – alarmingly low
BanklessTimes.comrecently shed light on how scammers continue to wreak havoc on the cryptocurrency sector. According to our data, crypto investors lost $667 millionto different scams in H1/2023. What’s more, the recovery rate of stolen funds is alarmingly low.
Law enforcement has only managed to retrieve $183 million. That leaves $483.5 million, or 72.5% of the looted funds, potentially lost forever.
Crypto scams prevalent, underreported in UK
It’s not just US customers that have problems with scams. They are an issue in the UK too, where crypto fraud is massively underreported. Data from TRM Labsshow 3,244 people reported fraud in 2019 and their total losses were GBP 55 million.
The cases had almost tripled in 2021, reaching 9,427. The losses incurred were more than triple that year, amounting to GBP 190.5 million.
TRM Labs expect the trend to continue in 2022. Losses from January to August 2022 alone have exceeded GBP 160 million. They are expected to be around GBP 240 million for the whole year.
