Pig butchering scams are a sneaky and harmful type of online fraud that can hit hard both financially and emotionally.
In this post, we’ll break down what these scams are, how they operate, and what red flags to look out for. By staying informed and knowing the warning signs, you can protect yourself and others from falling victim.
Let’s dive in and learn how to spot and avoid these scams.
What is pig butchering in crypto?
A pig butchering scam, also known as a “sha zhu pan” scam, is a type of online investment fraud. Scammers use fake online personas to trick people into investing in phony schemes. They might use deepfake images and create believable characters to build a relationship with their targets. This process, known as “fattening the pigs,” involves regular, friendly interactions to gain the victim’s trust before pulling the scam.
The term “pig butchering” comes from the analogy of fattening a pig before slaughtering it. In these scams, the victim (the “pig”) is slowly groomed and manipulated over time, just like a hog being prepared for slaughter. The scammers build a relationship with their victims to make them more likely to invest larger sums before ultimately deceiving them.
These scams, often involving cryptocurrency, have become a major global issue. According to the FBI’s 2023 Internet Crime Complaint Report, investment scams caused the highest financial losses of all tracked crimes last year, with crypto-related fraud making up nearly 90% of these losses. The total reported losses reached $4.57 billion, marking a 38% increase from the previous year.
How pig butchering scams work exactly
These scams got their name because they involve “fattening up” a victim, just like fattening a pig before slaughter. Here’s how it goes down: scammers create fake profiles, sometimes using deepfake images, to reach out to people through texts, social media, or dating apps. They build what seems like a real relationship by chatting often and being friendly.
Once they’ve gained the victim’s trust, they start talking about cryptocurrency. Instead of directly asking for money, scammers offer to help with investment strategies and direct victims to send money to various platforms they control. This is where the scam starts to unfold.
At first, victims might send small amounts to a crypto exchange. Scammers keep the illusion going by showing fake account information that makes it look like the investments are growing. They might even let victims withdraw a small portion to keep things looking legitimate. But soon, they’ll push victims to send more money, draining them dry.
When victims try to withdraw their money, they often find they have to pay huge fees or taxes first. By this time, the scammers have already taken the money and moved on to new targets. Unfortunately, many people end up losing their entire life savings to these schemes.
Impact of pig butchering scams
Pig butchering scams are not only growing more common but also having a huge impact on people’s lives. Victims can lose anywhere from thousands to millions of dollars, with average losses varying. For example, a 2022 study by GASO found that American victims lost an average of over $210,000. Many victims drained their bank accounts or borrowed money from friends and family to cover their losses. A study from TRM suggests the average loss could be even higher.
Overall, researchers from the University of Texas at Austin estimate that over $75 billion was lost to these scams from 2020 to 2024, with the true number likely being even higher. Many people don’t report their losses, possibly out of embarrassment or fear. For instance, the Australian government reports that only 13% of victims come forward.
According to the United Nations report, the Mekong region of Southeast Asia is a major hub for these scams. In this area, casinos, unregulated borders, and ongoing conflicts, particularly in Myanmar, create perfect conditions for massive money-laundering operations. Criminal groups are expanding into online fraud, using casinos to make their ill-gotten gains look legitimate while funding their illegal activities.
Even more disturbing, these scams often rely on forced labor. Around 220,000 people in Cambodia and Myanmar are estimated to be coerced into running these scams. Criminals use social media to lure people with fake job offers, only to force them into working on these scams under threat of violence. Families of these forced workers often have to pay ransoms in cryptocurrency to secure their release.
Real-life pig butchering scam cases
A Malaysian nurse’s story
A 37-year-old Malaysian nurse working in Singapore fell victim to a pig butchering scam that left her over $270,000 in debt. During COVID-19 travel restrictions, she felt lonely and started looking for companionship online. She met a man who claimed to be a 34-year-old interior designer from Shanghai living in Vancouver. They built a friendship, and he eventually persuaded her to invest in a fake platform.
She began investing larger and larger sums of money, which she funded through bank loans, selling her car, borrowing from friends and family, and even taking out a mortgage on her house in Malaysia. When her father warned her about the scam, she tried to withdraw her money but was told she needed to pay an extra $240,000 for “safety purposes.”
To try and pay back her debts, she took on part-time jobs but was left with only $250 a month for living expenses after covering loan repayments and rent. Eventually, she had to start bankruptcy proceedings. Overwhelmed by the debt and unable to recover her losses, she even considered suicide.
Case of an IT worker from India
Here’s a heartbreaking example: an Indian IT professional living in Philadelphia became a target of a sophisticated pig butchering scam. The scammers combined romance fraud with fake cryptocurrency investments to trick her. They used deepfake videos and convincing scripts to build trust and manipulate her emotions, eventually persuading her to invest in fake crypto platforms. Sadly, she ended up losing over $450,000 and was left with a huge amount of debt.
Her nightmare began when she met a man named “Ancel” on the dating app Hinge. He said he was a French wine trader. Their chat quickly moved to WhatsApp, where “Ancel” deleted his Hinge profile to make it seem like he wanted to focus only on her. The scammer took advantage of her recent divorce to build trust and make her more vulnerable. He even made up a story about joint retirement plans, claiming they could be funded by profitable cryptocurrency investments.
How to spot pig butchering scams
- Unexpected messages: Be cautious with unsolicited contact from unknown numbers or social media profiles. Verify that the people you meet on dating apps are genuine.
- Unrealistic investment promises: Watch out for offers of guaranteed high returns with little or no risk. If it sounds too good to be true, it probably is.
- Urgency to invest: Genuine opportunities won’t pressure you into making quick decisions. If someone is pushing you to invest fast, be wary.
- Fast-track romance: Be skeptical of online strangers who quickly declare strong feelings and then ask for money.
- Personal info requests: Never share sensitive information like bank details with people you haven’t verified.
- Unverified investment sites: Ensure that any investment platforms or apps are officially registered with regulators.
- Hard-to-access funds: Be suspicious if you have trouble withdrawing your supposed investment returns.
- Inconsistent information: Look out for any contradictions or vague details about the investment.
- Easy wealth claims: Be wary of anyone promising quick riches with minimal effort.
- Isolation tactics: If someone tries to cut you off from friends and family, it’s a major warning sign.
Conclusion
Pig butchering scams are a serious and growing threat in the world of online fraud, combining romance and investment deception to exploit victims. These scams involve building false relationships to trick people into investing large sums of money into fake cryptocurrency schemes. The impact can be devastating, with victims losing significant amounts of money and experiencing emotional distress.
To protect yourself, stay alert for warning signs such as unsolicited contact, unrealistic investment promises, and pressure to act quickly. Always verify the legitimacy of anyone asking for personal information or investment, and be cautious of online suitors who seem too good to be true.
Helpful tip: If you suspect you’re being targeted or have fallen victim to a scam, report it to the relevant authorities immediately. This not only helps in potentially recovering your losses but also aids in preventing further scams.
By staying informed and vigilant, you can better safeguard yourself against these harmful schemes and avoid becoming another statistic in the growing number of pig butchering scam cases.
