Pig Butchering scams: How crypto investors are being targeted

Ever heard of the term “pig-butchering”? It is a scam that steals your wealth and breaks your heart.

With the rise of fourth-revolutionary technologies, scammers have engineered new dirty tricks to steal money from innocent individuals. One such scam are romance-related scams, aka pig butchering scams.  

Pig butchering has emerged as one of the most deceptive and financially devastating frauds. This sophisticated scheme blends elements of romance scams and investment fraud, trapping victims into believing they are engaging in legitimate, high-yield crypto investments. 

The name originates from a method where scammers "fatten up" their victims—building trust over weeks or months before financially slaughtering them by draining their funds. 

Governments and law enforcement agencies worldwide have been issuing warnings and cracking down on these fraudulent operations, yet the scams continue to evolve, luring unsuspecting investors into elaborate traps.‍

How Pig Butchering Scams Work

Scammers typically initiate contact with victims through social media platforms, dating apps, or even seemingly random text messages. 

They pretend to be wealthy entrepreneurs, cryptocurrency traders, or financial experts, portraying a lifestyle of luxury and success. Once they establish communication, they gradually build trust, often engaging in daily conversations and forming an emotional or professional bond with the target.

Alfred Gull, a German clinical and healthcare psychologist at the the German Neuroscience Center, explains, "The scammers invent characters that address the victim's desire for love, community, and understanding. They reveal their seemingly personal stories, dreams, and weaknesses, creating the illusion of a real relationship."
"The perpetrators play with emotions. The alleged admirer pays attention to the victim and builds a strong bond over several months. The other person becomes emotionally dependent. It feels good to have a message on your phone every morning from someone thinking of you.” 

“The longer this takes, the more difficult it becomes to break off contact. Who likes to admit after months of a relationship that everything is unreal? With their demand, the fraudsters initiate pressure: The need is supposedly great, and the time is short.”

Once trust is secured, the scammer introduces an investment opportunity, usually a cryptocurrency trading platform that appears legitimate. The victim is encouraged to make an initial deposit, and in most cases, they see small, immediate gains, reinforcing their belief in the platform’s legitimacy. 

The scammer urges them to reinvest more substantial amounts, often convincing them to liquidate their savings or take out loans to maximize returns. As soon as the victim attempts to withdraw funds, they are met with excuses—hidden fees, taxes, or security verifications—until the scammer vanishes, leaving them with devastating financial losses.

Eric Jardine, Cybercrimes Research Lead at Chainalysis, explains, "In researching for our 2024 Crypto Crime Report, we found that while the total amount of cryptocurrency stolen through scams fell 29.2% year-on-year—to US$4.6 billion in 2023, down from US$6.5 billion in the previous year—romance-related crypto scams doubled in revenue year-on-year. Additionally, as we showed in our 2024 Crypto Crime Mid-year Update Part 2, the largest single scamming operation in 2024 is a pig butchering syndicate run out of the KK Park compound."

"More worryingly, there’s a clear and significant upward trajectory. Since 2020, revenues from this type of fraud, where attackers cultivate seemingly personal relationships to trick victims into parting with money, have multiplied an estimated 85 times over. As well as being one of the few categories of crypto fraud last year that saw revenues increase, pig butchering, or romance scams, extracted more money from individual victims than other types of crypto fraud—with payments averaging $4,593 each last year."

"In terms of tactics, this type of social engineering attack typically involves attackers investing time and effort in building meaningful long-term relationships with victims. Romance scammers start by building a relationship over time with the victim, often initiating contact by pretending to have text messaged a wrong number or via dating apps. As the relationship deepens, the scammer will eventually push the victim to invest money (sometimes cryptocurrency, sometimes fiat) in a fake investment opportunity, and continue to do so until they eventually sever contact."‍

Recent Pig Butchering Cases and Law Enforcement Crackdowns

Governments worldwide have recognized pig butchering scams as a severe financial crime, leading to major crackdowns and asset seizures. In the United States, federal authorities have been actively pursuing criminals operating these scams. 

Jardine further stated, "We cannot isolate the geography of the addresses that were compromised. Scammers can theoretically be based anywhere, but researchers and reporters have established scamming hubs in Southeast Asia and parts of Africa."

"Chainalysis data indicates that US$2.7 billion has been lost to approval phishing scams since May 2021. Further, of the 1,013 addresses that we identified as being involved in this type of scam, it appears the single most successful approval phishing address alone likely stole US$44.3 million from thousands of victim addresses."

Beyond the United States, international law enforcement agencies are also fighting back. In Nigeria, the Economic and Financial Crimes Commission (EFCC) arrested 792 individuals in connection with a large-scale pig butchering network. 

Investigators revealed that these criminals had been targeting victims in the United States and Canada, using fake cryptocurrency investment websites to siphon millions of dollars from unsuspecting investors. With increasing global cooperation, authorities are intensifying efforts to shut down these scams and bring perpetrators to justice.‍

Government Warnings and Steps to Protect Investors

Financial regulators and consumer protection agencies have repeatedly issued warnings about pig butchering scams. The Federal Bureau of Investigation (FBI) has classified pig butchering as one of the most rapidly growing online investment scams, estimating that fraudsters stole over $2.57 billion in crypto-related scams in 2023 alone. 

If funds are lost, what methods can be used to track and recover them?

According to Jardine, "Employing Chainalysis Crypto Investigation solutions is especially effective in tracking the movement of funds. It’s important to note that funds are typically moved from consolidation addresses to cash-out points—primarily centralized exchanges."

"Last November, the stablecoin issuer Tether and the cryptocurrency exchange OKX announced that they leveraged Chainalysis and collaborated with the United States Department of Justice in an investigation that led to Tether freezing approximately US$225 million in USDT tokens linked to an international human trafficking syndicate in Southeast Asia responsible for romance scams."

The US Secret Service has also been actively investigating these crimes, recently seizing an entire web domain used to lure victims into fraudulent crypto investments.

The Financial Crimes Enforcement Network (FinCEN) released an advisory detailing how these scams operate and provided guidance to financial institutions on identifying and reporting suspicious transactions. 

FinCEN urged banks and crypto exchanges to monitor irregular transactions, report suspected fraudulent activity, and educate their customers about red flags to prevent future victimization.

How are scammers able to create new accounts over the years despite efforts to prevent this?

"Most people are unaware of just how complex and organized cybercriminal networks tend to be. In our research, we found that between 2022 to 2024 just one popular fraud shop received US$10.5 million from scammers known to perpetrate romance scams."‍

Phishing Emails: Another Common Tactic

According to Alfred Gull, fraudsters also use phishing emails to deceive victims.

"You receive an email from a well-known sender, such as Amazon, Netflix, social media, or the police. Only: In truth, fraudsters are behind it. For example, you are asked to update the credit card details within 24 hours via a link or to deposit a small amount – otherwise, the online access will be blocked, or the ordered package will be returned for a fee."
"The emails are provided with a well-known company logo, well-formulated, and look professional. We let ourselves be fooled because we find receiving such emails from the police normal. In addition, there is time pressure: If we miss the scheduled deadline, there is a risk of disadvantages."‍

How to Avoid Pig Butchering Scams

As pig butchering scams continue to evolve, it is critical for individuals to recognize red flags before falling into the trap. Fraudsters often initiate conversations out of nowhere, claiming a wrong number text or a chance encounter on social media. Their profiles appear lavish, filled with luxury items, high-stakes trading screenshots, and promises of quick wealth through exclusive investment opportunities.

Victims are gradually groomed into believing they are making sound financial decisions, with scammers leveraging emotions—whether romantic interest or professional mentorship—to manipulate them into investing. Once the victim attempts to withdraw funds, the scam becomes apparent, but by then, it is usually too late.

To avoid becoming a victim, never trust unsolicited investment offers, especially those involving cryptocurrency. 

Conduct thorough research before committing funds to any platform, ensuring that the company is registered with financial authorities and that its investment model is transparent. Be wary of individuals who pressure you to invest quickly, claim risk-free high returns, or refuse to engage in video calls or in-person meetings. If something feels off, seek advice from financial professionals or report suspicious activity to law enforcement.‍

The Future of Anti-Fraud Measures

While pig butchering scams have become a global menace, law enforcement agencies, regulators, and the crypto industry are ramping up efforts to combat these fraudulent operations. Advances in blockchain analytics, AI-driven fraud detection, and improved regulatory oversight are helping authorities track down criminals and recover stolen funds.

However, the most powerful defense against pig butchering scams remains public awareness. The more individuals understand the warning signs, the harder it becomes for fraudsters to succeed. 

With ongoing enforcement actions, increased consumer education, and technological advancements, the hope is that pig butchering scams will eventually be eliminated from the crypto ecosystem. Until then, investors must remain cautious, question too-good-to-be-true offers, and protect their hard-earned money from online predators.