In a move that sends shockwaves around the world’s finance sector, Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), obtained a Federal Court order to liquidate 95 companies suspected of being at the center of massive scam operations. The companies, some of which were established using false details or stolen identities, are now being wound up on just and equitable grounds.
This action is one of Australia’s wider efforts against a new generation of scams that experts compare to a “hybra”, every time one is chopped down, several more appear to grow in its place.
Inside the Pig Butchering Scams
The companies are reportedly associated with “pig butchering” scams, sophisticated cons that combine romance and investment fraud. Scammers establish fake relationships with victims over a period of time, introducing them step by step to seemingly profitable crypto or forex investment schemes. The scams are made to appear professional, usually backed by glossy websites and mobile apps that resemble genuine trading platforms. But at the back, victims’ funds are quietly routed into criminal circles.
These criminal activities are not run-of-the-mill rackets. Global investigative reports indicate that most of them are based from big-time centers of activity in Southeast Asia and Eastern Europe. They have call center-type operations, preying on high-income individuals such as professionals, executives, and technologically savvy users in developed countries like the United States.
Global Reach, Local Damage
The liquidation process, which has been conducted by appointed administrators Catherine Conneely and Thomas Birch of Cor Cordis, has already revealed the extent of the damage. Close to 1,500 claims have been made by victims from 14 nations, with losses reported exceeding $35.8 million. Amazingly, just three of the 95 companies had any recoverable assets.
Justice Angus Stewart, who heard the court case, referred to overwhelming evidence of fraudulent activity and a clear absence of integrity in the running of these firms.
A Relentless War on Online Fraud
ASIC’s Deputy Chair Sarah Court highlighted the need to knock down these impersonators, which she said tricksters go out of their way to establish confidence and make the impression of credibility. The regulator has already taken down over 10,000 scam sites and continues to shut down an average of 130 sites per week.
Australia’s recent move is a wake-up call to the world: defending consumers in the digital economy demands quick and aggressive action. And as ever-more sophisticated scams become ever-less bound by geography, regulators everywhere must be as merciless in response.
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