“Pig slaughtering” or “pig butchering” may not sound like scams, but they are. These are the latest crypto scams that involves sophisticated, yet phony, cryptocurrency investment platforms. These scams are run by a fraud ring of cryptocurrency scammers who mine dating apps and other social media for victims and the scam is becoming increasingly popular.
According to the Federal Trade Commission (FTC), Americans have lost over $1 billion to crypto-related scams since January 2021, and a little over half of the money lost—or $575 million—has gone to investment scams, like pig butchering. The FBI described the pig butchering scam as one that "pulls on heartstrings and purse strings."
Unlike most other cybercrimes, the FTC notes that younger people, specifically people in their thirties, are the most likely to fall for this type of fraud.
How these scams work
Investors invariably see fantastic returns on their investments, which encourages them to deposit more money to generate increasingly higher “returns.” In some cases, the victim is permitted to withdraw the value increase, with the effect of making them feel comfortable and invest more funds. Therefore, the victims get “slaughtered” after the scammer successfully convinces them to “fatten” their phony account over a period. The “slaughter” involves the scammer emptying the victim’s “investment account” and disappearing with the funds.
Where do these victims initially get scammed?
Social media is the channel of choice. Victims often get scammed from a post or advertisement on social media. Many of these platforms include extensive study materials and tutorials on cryptocurrency investing. New users are encouraged to team up with other investors and to make only small investments.
Look for these warning signs!
- A random email engaging you in frequent conversations. This could also be an instant message or a reminder from an unknown person about a coffee date. The message is irrelevant, the goal is to simply get a curious recipient to respond in any way.
- The new acquaintance avoids phone or video communication.
- The conversations quickly turn to an investment that is earning the new acquaintance high returns.
- The conversation is flirtatious, and the new acquaintance praises you, mostly when talking about investments.
- The conversations about other topics are short, and the scammer may threaten to stop communicating.
- The new acquaintance talks about what you should do with investment returns and directs your attention on the return you made on a small investment. They may bring up how much more you could have made.
Unlike typical investment scams that pressure victims to invest NOW, the “pig butchering” scam relies on priming the victim over time, slowly exposing them to the idea of investing in cryptocurrency. Within time, the big “slaughter” happens.
Where to Report Investment Scams
If you suspect an investment scam, report it to the FTC at ReportFraud.ftc.gov.
If your personal information has been misused in an investment scam, visit IdentityTheft.gov for steps you can take to deal with problems that may arise.
Category: Financial Literacy & Safety