- What is the “pig butchering” crypto scam?
- How the “pig butchering” scam works in cryptocurrency
- Real examples of cryptocurrency pig butchering scams
In recent years, another type of scam called “pig butchering” has emerged. It targets cryptocurrency users. Scammers make you feel special by building fake relationships to gain trust over time. But here’s the catch: they’re not in love, and their friendship can’t be trusted. All they want is to convince you to invest in what seems like an amazing opportunity to make easy money.
In 2021, scammers used fake profiles on dating apps like Tinder and Bumble to gain trust and trick people into investing in fake cryptocurrency platforms. They gave the impression that victims were making money, but the funds disappeared when they tried to withdraw funds. This scam resulted in millions of dollars in losses, with victims unable to recover their investments.
What the “pig butchering” crypto scam is all about
The “pig butchering” scam also known as “Sha Zhu Pan” in Chinese, is a sneaky and long-term type of investment scam that often begins on social media or apps as a romantic encounter. In October 2023, 12% of dating app users in the US were scammed in this way.
According to the US Federal Bureau of Investigation (FBI), these scams first appeared in China in 2019. Since then, Southeast Asia has become an important hub with organized groups in countries like Laos, Cambodia, and Myanmar running these schemes as a business.
The name comes from the fact that the scammers see their victims as “pigs” whom they convince to invest small amounts at first, and once the pigs believe in the earning potential, they are encouraged to invest more and more – essentially, they “fatten” the pig for butchering. These pigs are then butchered when the scammer thinks they’ve gotten all they can from them, which means they’ve probably stolen the victim’s funds and disappeared.
The social media platforms used to defraud victims are called “pigsties” and the lies the scammers tell to keep the money flowing are called “pig feed.” The butcher in this scenario is the scammer.
Interesting fact. In April 2023, the US Department of Justice seized about $112 million in cryptocurrency related to pig butchering fraud without revealing the identities of the suspects.
How “pig butchering” fraud works in cryptocurrency
Step 1: Initial contact
It all starts with the scammer sending the victim a message on a dating app. His profile picture looks friendly and genuine, but it’s actually stolen from someone else or generated by artificial intelligence.
Step 2: Building trust
Over the next few weeks, the scammer and the victim who has been hooked by the friendliness chat about their interests, hobbies, and career goals. The victim becomes curious about the scammer’s life, especially his success in cryptocurrency investing. The victim, who is new to cryptocurrency, finds himself intrigued, begins to trust the scammer, and asks him to help her successfully invest in cryptocurrency. This step, known as “piggybacking,” is designed to build trust and create a sense of security as scammers prepare to trick their victims into investing.
Step 3: Investment proposal
One day, the scammer tells his victim about a fantastic cryptocurrency investment opportunity and promises to help him make money. “The pig” agrees and receives a link to an investment platform that appears legitimate but is actually fake, completely controlled by the butcher and his team of scammers – a classic pig-butchering tactic of crypto scammers.
Step 4: High returns and hook
The victim decides to invest his money, starting small. The platform shows him that the investment grows quickly and the money is withdrawn without any problems. This convinces the victim that the platform is legitimate and he feels safe investing more money.
Feeling confident and eager to make more profits, the victim invests even more money, thinking it is on his way to financial success.
Step 5: Disappearance
Eventually, the victim has invested a significant amount of money. But one day he tries to withdraw another capital and is unable to do so. Suddenly, the person he is talking to stops responding to his messages. It is then that he realizes that he cannot access their funds – he has been defrauded, and the fraudster has disappeared without a trace.
This final stage is what criminals call “pig killing” – when they disappear with all the money they tricked their victims into investing.
Real-life examples of cryptocurrency “pig butchering” scams
An investor from the San Francisco Bay Area lost $1.2 million dollars in a cryptocurrency pig butchering scam. It all started on WhatsApp, where a scammer pretended to be an old coworker, gained his trust and convinced him to invest in a fake cryptocurrency platform. Despite initial caution, the investor lost his savings and took out loans, believing he could pay back the money. Eventually, the scammer disappeared.
Former Heartland Tri-State Bank CEO Shan Haynes was accused of stealing $47.1 million from the bank to invest in cryptocurrency. He reportedly made unauthorized wire transfers to cryptocurrency wallets using money from a local church and investment club. His risky cryptocurrency trades led to the bank’s collapse in 2023. Some speculate that Haynes may have been duped using piggybacking techniques in fraudulent crypto schemes.
In late 2023, Sophos X-Ops uncovered a massive liquidity mining scam involving three Chinese criminal groups that victimized nearly 100 people. One victim, scammed through the MeetMe app, lost $22,000 (excluding fees for processing bank transfers to exchanges and buying tokens). Scammers stalked him, demanding more deposits and even using artificial intelligence-generated messages to re-establish contact.
These are just three examples out of hundreds or even thousands of similar cases that show how widespread “pig butchering” scams have become. Despite repeated warnings, many people fall victim to these scams, losing significant amounts of money and facing devastating financial consequences.
