MEMPHIS, Tenn. – Every hour of the day, cybercriminals are calculating and crafting elaborate schemes to steal our hard-earned money.
However, cryptocurrency scams might be the most devastating and destructive yet.
“It is kind of unlike any other scam I’ve seen,” explained Jason Wray. “I’ve kind of bragged about never being scammed, but I guess that’s over.”
A seemingly legitimate investment opportunity
In Milan, Tenn., brothers Darrell and Jason Wray thought they found the perfect investment opportunity: cryptocurrency.
“It was just so real,” Darrell Wray said. “They’ve got it really good.”
One of Darrell’s coworkers promised they could withdraw 3% of their earnings a day. The Wrays watched their money grow into the tens of thousands on what appeared to be a legitimate cryptocurrency website.
At one point, Darrell was even able to withdraw $1,000. To him, it seemed legit.
“This was different,” Jason explained. “I had never seen a scammer give money back.”
The ‘riskiest’ type of scam
More than 80% of people targeted by the scam reported losing money. On average, victims lost $3,800.
According to the FBI, older Americans (aged 60 and up) lost more than $1.2 billion to investment schemes in 2023.
A new study from the University of Texas at Austin suggests that cybercriminals moved $75 billion into suspicious accounts from 2020 to 2024.
The Wray brothers reported their scam to the Federal Trade Commission and the Better Business Bureau of the Mid-South.
Daniel Irwin has met victims who’ve lost tens of thousands of dollars.
“You’ll give a little bit of money and you’ll get something back,” explained Irwin, a spokesman for the Better Business Bureau of the Mid-South. ‘You’ll give a little money, then you get something back. They’re fattening you up, and then they’re going to ask for something more substantial.”
How ‘pig butchering’ works
A new type of crypto scam might be the most manipulative and menacing in the world: Pig Butchering.
“The thing that really shocked me was just how successful the scam is,” said Cezary Podkul, a reporter who investigated the crime for ProPublica, a non-profit newsroom dedicated to in-depth reporting.
‘Pig butchering’ is an incredibly deceptive and damaging tactic that is notably more personal than the crime that impacted the Wray brothers.
“The scammers will take the time to get to know you and speak to you about anything but investing,” Podkul explained. “They’ll try to get to know your hobbies, your family.”
Another of his investigations found that many of the ‘scammers’ are actually victims themselves.
“It’s nothing that they ever wanted to do and the last job that they ever imagined they’d be reporting for,” Podkul explained. “Nevertheless, that’s their new reality.”
Here’s how ‘pig butchering’ scams work:
- A victim receives an unsolicited text or message from a stranger, even something as simple as a “wrong number”
- The scammer strikes up a conversation and tries to build a relationship: “fattening the pig” before slaughter
- The stranger’s extremely personal messages could continue for weeks, or even months
- Eventually, they will convince a victim to join their investing success
- The victim might even get some of their money back from the “investment opportunity”
- The scammer will manipulate the victim to invest a much larger sum, up to their life savings
- They will ‘slaughter’ the victim by stealing the money after weeks of earning their trust
“Routinely, you’re seeing Americans losing millions of dollars of their hard-earned life savings,” Podkul explained.
Recovering the painful losses
In Santa Clara County, Calif., prosecutor Erin West was the first in the country to recover millions of dollars victims lost to pig butchering scams.
“It really is the most dramatically devastating type of crime I have seen in my 25-plus years as a prosecutor,” she explained.
After a local software engineer lost $300,000 in her county, West was able to trace it to Binance, a legitimate cryptocurrency exchange.
“What we found was that Binance was happy to help us and happy to get that dirty money off their platform and get it back into the hands of the victim,” West explained.
In a year-and-a-half, she has helped 26 victims recover $2.5 million in crypto losses in her county.
“(Pig butchering) is designed to take every penny from the victims,” she explained.
The victims touch every age, ethnicity and demographic.
“The fact is, these scammers are going after anybody that has a smartphone,” she explained. “Anybody that has any access to money.”
West has also trained 1,600 law enforcement officers across the country on how to help victims get their money back.
While pig butchering is the most devastating of the crypto scams, there are many other variations that all appear legitimate.
Before investing thousands of dollars in a new opportunity, both West and Podkul recommend that you get the advice of a family member. Remember, there is very rarely a guaranteed return on investment. The more you invest, the greater the risk.
The Wray brothers warn everyone to be cautious about unsolicited offers to invest in cryptocurrency.
“I’m not ashamed about losing,” Jason said. “I wanted to tell people. I want more people to know.”
Darrell’s family lost $12,000. Jason lost $2,000.
They had one message for anyone enticed by get-rich-quick investments.
“If it’s too good to be true, it is,” Jason said. “I am not saying ‘it probably is’ anymore. If it’s too good to be true, it is.”
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