A new fraudulent scheme has surfaced, targeting cryptocurrency investors and warranting attention.
Termed "pig butchering," this scam involves duping individuals into believing they are engaging in legitimate crypto investments, while in reality, the perpetrators are misappropriating their funds.
How the Pig Butchering Scam Works
Pig butchering starts when scammers reach out to potential victims on apps, social media, dating sites, etc., using fake profiles.
They take their time building up a friendly relationship and gaining the victim's trust - just like a farmer fattening up a pig before slaughter.
Once they've got the victim's trust, the scammers suggest investing in cryptocurrency together.
They'll have the victim put in a small amount at first. Then they'll fake "profits" that let the victim withdraw a bit, making it seem legitimate.
But it's all an elaborate mirage to get the victim to keep investing more and more money over time.
The scammers create fake crypto wallets and trading platforms that appear real. They may even allow additional small withdrawals periodically to maintain the illusion.
Eventually, when the victim tries to cash out their full invested amount plus profits, they get hit with crazy withdrawal fees, excessive tax charges, or find they can't access anything at all. By then, the scammers have disappeared with all the money.
Unfortunately, these sophisticated pig-butchering crypto scams are becoming increasingly common worldwide. They capitalize on the novelty and anonymity of cryptocurrencies.
In one recent high-profile case, a person in Massachusetts lost over $400,000 before authorities seized around $2 million connected to the larger scam ring operating that pig butchering scheme.
Similarly, four individuals in Los Angeles were arrested in December 2023 and charged with running a pig butchering operation that defrauded multiple victims out of substantial amounts.
The FBI has reported that cryptocurrency scams result in billions of dollars in losses globally each year, preying on unsuspecting investors.
How to Protect Yourself
The best defense against pig butchering and other crypto scams is to remain extremely vigilant and skeptical, especially of unsolicited investment pitches or advice from people you don't know well, even online friends or acquaintances.
Never send money to an investment opportunity until you've thoroughly researched it and confirmed it's 100% legitimate.
Check reviews, backgrounds, registration details, everything. If something seems even slightly off, don't risk it.
It's also crucial to watch out for other common crypto scam tactics like:
- Blackmail or extortion attempts demanding crypto payments to keep information private
- Fake business/investment opportunities promising guaranteed crazy returns
- Bogus cryptocurrency job listings that require upfront crypto payments just to get started
- Giveaway scams from fake celebrity or influencer social media accounts
If an opportunity sounds too good to be true, it concerns cryptocurrencies and get-rich-quick money-making schemes. Be extremely cautious about sending any funds.
If you do get hit with a blackmail threat, report it to the FBI immediately. And make the FTC aware of any other crypto scams you encounter. Staying informed is the best defense against sophisticated schemes trying to part you from your money.
Don't fall for pig butchering tactics, no matter how convincing or patient the scammers are.
Do your thorough research before investing, and avoid unsolicited crypto moneymaking offers altogether. Your financial security has to come first.