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Cryptocurrency Scam Victim Who Lost Over $1 Million To Get Over $100,000 Back, Prosecutor

A California victim of a cryptocurrency scam known as pig butchering, who lost over $1 million last year, is now set to receive approximately 10 percent of his losses back, according to a local prosecutor.

Erin West, a deputy district attorney in Santa Clara County, Calif., told Forbes on Friday that a portion of over $318,000 worth of cryptocurrency previously seized by her office actually belongs to a scam victim that Forbes has identified as Cy. (Forbes previously agreed to identify the 52-year-old Bay Area man under that pseudonym.)

Since that seizure, the Santa Clara district attorney’s office has begun the legal process of identifying precisely who owns those funds, and the procedures of how to return them to their rightful owners.

“We have funds in our government wallet that belong to [Cy],” she told Forbes by text message. “$113,000.”

The prosecutor soon explained by phone to Forbes that during the process of analyzing and returning the seized crypto to victims, members of the “REACT Task Force,” an alliance of local, state, and federal law enforcement officials in the Bay Area, traced $113,000 worth to the losses previously reported by Cy.

The funds are held in a cryptocurrency “stablecoin” known as USDT, or Tether. The REACT Task Force investigators, like many law enforcement agencies, use blockchain tracing software to determine how and where tranches of cryptocurrency move. But, these techniques sometimes result in dead ends – the funds move beyond investigators’ reach, or they are unable to determine where they’ve ended up.

But in this case, West said, it was “dumb luck” that one portion of Cy’s losses ended up in the $318,000 that her office had already seized.

“That’s 10 percent of his money, any money back is a win,” West explained further by phone, adding that “ideally” Cy should have that money in hand in 30 days, and that she plans on formally informing the court overseeing the seizure case next week.

When Forbes reached Cy by phone and told him the news, he was stunned, and sounded like he was almost in tears.

“I feel numb, because I don’t know how to feel,” he said. “It’s been up and down, I have had hopes and it drops, but until I actually see the money, I’m trying to not get my hopes too high, but it’s a good start.”

Pig butchering is a relatively new long-game financial con in which “pigs,” or targets, are “butchered” by people who convince them to invest ever-larger sums in purported cryptocurrency-fueled trading platforms. The fake platforms are designed to look real, and make the victims believe that their investments are making fantastic returns — until their scammer, and all the money they believe they’ve invested, disappears.

Victims often lose significant sums, and the practice is so lucrative that it’s being scaled up and carried out en masse in countries like Cambodia, Laos and Myanmar. So far, it has been very difficult for American law enforcement to get money back to victims.

Jan Santiago, the deputy director of advocacy group Global Anti-Scam Organization, previously told Forbes that his group estimates that global financial losses are in the billions of dollars.

In recent months, West has been inundated with reports from financial victims – just recently she had to tell another Bay Area victim that her funds were completely lost. However, the prosecutor has also begun a process to train and educate her counterparts in other counties and states as a way to galvanize scam-related investigations.

“I’m so happy for [Cy],” she continued. “I’m so glad we are able to do this for him.”

“I mean, yeah, I lost over a million and I only got $113k back. But there’s hope now!”

Cy, cryptocurrency scam victim

Shawn Bradstreet, the special agent in charge of the United States Secret Service’s San Francisco Field Office, told Forbes as recently as last month that Cy’s losses were “unrecoverable,” but that the agency was continuing to investigate.

To date, Cy has only been able to recuperate a very small portion of his losses via a GoFundMe page set up by a relative, and nothing from law enforcement.

Soon after hanging up the phone with Forbes, Cy texted with more excitement.

“Man! I don’t know what to do with myself!” he wrote. “I mean, yeah, I lost over a million and I only got $113k back. But there’s hope now! There’s definitely more hope than 30 min ago. I don’t know what to do with myself right now. Wow!”

Read More: Cryptocurrency Scam Victim Who Lost Over $1 Million To Get Over $100,000 Back, Prosecutor

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