The U.S. Securities and Exchange Commission (SEC) charged three Nigerian individuals on Dec. 11 with impersonating securities brokers and investment advisers in order to execute a scheme involving digital assets. The three defendants allegedly diverted over $2.9 million from at least 28 investors by directing them to fraudulent platforms and instructing them to purchase bitcoin at legitimate brokerages or crypto exchanges before transferring the funds to blockchain addresses linked to the defendants.
The defendants reportedly created fake websites impersonating professionals associated with established U.S. firms and used voice-modification software, online group chats, and social media to cultivate trust and drive interest in their purported trading expertise. As technology advances, impersonation scams appear to be increasing in sophistication, including the use of AI-driven content and deepfake audio or video.
The alleged scheme encouraged investors to research identities lifted from the public records of actual investment professionals. Operators set up fake investment account interfaces showing unrealized gains, prompting victims to contribute additional funds. Although participants saw purported monthly returns of up to 25%, funds were never invested as claimed and attempts to withdraw assets led to demands for further fees.
Regulatory units with crypto-specific mandates, including the SEC’s Crypto Assets and Cyber Unit, were involved, indicating that such enforcement actions increasingly target areas where traditional fraud methods intersect with decentralized financial networks and digital asset platforms. Voice-changing software and spoofed phone numbers made it difficult for investors to verify identities, and the perpetrators’ use of encrypted messaging apps and social platforms allowed them to operate outside traditional brokerage environments.
Their reliance on digital assets, primarily Bitcoin, added layers of complexity, including blockchain transfers and multiple addresses, complicating asset tracing for the SEC. The SEC filed a complaint in the U.S. District Court for the District of New Jersey and is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
The alert by the Office of Investor Education and Advocacy recommends verifying identities through sources like Form CRS and publicly available databases, avoiding unverified contact details, and maintaining heightened vigilance when prompted to send funds via crypto.
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<p>The post SEC Charges Nigerian Nationals for $2.9M Crypto Impersonation Scheme: A Growing Threat in Digital Assets first appeared on CoinBuzzFeed.</p>
