Scammers in pig butchering scams refer to their victims as “pigs” because they earn their trust through complex stories designed to “fatten up” victims. More specifically, the scammers build a romantic or close relationship with their victims before swindling them for money.
With the crypto industry rapidly evolving with new developments, crypto scams are also taking new forms to drain money out of naive investors. Last month, the Department of Justice seized crypto worth over $112 million linked to a scam known as “pig butchering.”
In this scam, fraudsters form long-term romantic relationships with victims and eventually manipulate them to make investments in fraudulent crypto trading platforms.
Another such scam happened back in 2022 when a scammer pretended to be an old colleague of a man who was then swindled for $1 million. Continue reading to learn more about how the scam works and what you can do to avoid becoming a victim.
What is the Pig Butchering Scam?
Scammers in pig butchering scams refer to their victims as “pigs” because they earn their trust through complex stories designed to “fatten up” victims. More specifically, the scammers build a romantic or close relationship with their victims before swindling them for money.
Once a victim falls into the trap, the scammer lures them into a fraudulent cryptocurrency investment scheme or platform. The origins of this scam stem from Southeast Asia. Its name was derived from the Chinese phrase “Shz H Pán,” meaning pig butchering.
As per data reported by the public to the FBI’s Crime Complaint Centre (IC3) in 2022, the bulk of the $3.31 billion scams involving cryptocurrencies included pig butchering.
How does the pig butchering scam work?
This concept is based on ‘fattening’ up victims with romantic bonding before stealing their money. First, bad actors create fake accounts on dating or social media apps such as Tinder to target potential victims. Then, the scammers manipulate the victim into becoming their lover or friend.
The scammer may start with a text from the wrong number and pretend to be a victim’s long-lost acquaintance. After gaining their trust, scammers encourage their victims to invest in bogus crypto trading platforms or investment schemes.
These fake crypto platforms may seem like legitimate websites that display an investment portfolio with large returns. The scammer promises the victim money, either via an insider tip or some investor knowledge. To further strengthen their bond, the scammers may even offer to trade with the victim.
Following this narrative, con artists encourage trade to convince their victims that they are making money. They may even advise the victim to withdraw some of the gains to fully acquire their trust. With this tactic, the victim is encouraged to add more money to their account.
If the victim later decides to withdraw their funds, the account may get blocked. It may even ask victims to pay a fee to access the funds. By the time the victim realizes the platform is fake, the transaction normally vanishes from the blockchain.
Recently, the FBI identified at least 10 victims who were unable to withdraw their funds under the pig butchering scam. United States Attorney Martin Estrada cautioned investors by saying that high-tech fraudsters take advantage of the hype surrounding cryptocurrency and encourage people to invest in get-rich-quick schemes.
He added that crypto presents new challenges to victims and law enforcement agencies trying to recover lost funds, which are likely to be worth billions of dollars in pig butchering schemes.
How to safeguard yourself
To avoid pig butchering scams, always check the legitimacy of an app or website before interacting with it. Double-check for misspelled URLs – for example, Binance.com vs. Binnace.com. Be extra suspicious about people promising high-profit investments. Fraudsters take time to build trust. Hence, conversations related to crypto investment may not take place in the initial stages. Nonetheless, be wary if such people happen to talk about investing in crypto platforms once they have befriended you.
Refrain from sharing sensitive information such as financial accounts. Pig butchering scammers may try to get their hands on as much money as they can. You could be told to pay large fees, or taxes to withdraw money. If you are pulled in too deep, avoid making excess payments and contact your local authorities immediately.
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