The lawsuit, filed by investment firm BTC Capital Management in the U.S. District Court for the Southern District of Iowa, states that Domains by Proxy, an online domain name provider, was used to create a fraudulent scheme with BTC.
The plaintiff alleges that a John Doe used Domains by Proxy to register a fake website for an organization with a similar name, Bitcoin Capital.
The perpetrator posted names and photos of the BTC Capital Management team and the actual address of BTC Bitcoin Capital, based in Des Moines.
On the fake site published a false certificate of registration of the business, it also duplicates the information from the official portal of BTC Capital Management.
The company’s management said that fraudsters were acting on its behalf, misleading potential investors and convincing them to invest in bitcoin.
BTC Capital Management became aware of the fraudulent scheme last fall when it began receiving phone calls from victims about their Bitcoin Capital account.
One user lost about $300,000 in this scam. The company reported the fake site to the cybercrime division of the Federal Bureau of Investigation (FBI) and sent five requests to Domains by Proxy to address the issue.
However, Domains by Proxy ignored these requests. The investment company is seeking a court injunction prohibiting further use of its information as well as damages.
Recall that recently hackers managed to steal more than $15 million in various cryptocurrencies through a website that mimicked the page of cryptocurrency exchange HitBTC.
Due to the increasing incidence of fraud, last year the Polkadot team launched a program to search for fraudulent sites, phishing apps and fake social media profiles masquerading as Polkadot.