Cryptocurrency Scam – Pig Butchering


Financial Crimes would like to introduce you to a new scam that you may have heard of – called Pig Butchering. This scam combines a romance scam with an investment scam. According to the Federal Bureau of Investigation (FBI), the term Pig Butchering refers to a time-tested, heavily scripted, and contact intensive process to fatten up the prey before slaughter.

We would like to give you an idea of the origination of this scam, how this scam works, red flags to look for, and tips to follow to protect yourself.

Origination

This scam began in Southeast Asia and has been spreading globally. It is executed by a ring of cryptocurrency scammers who mine dating apps and social media sites in search of victims. A fake profile is created by a con artist, creating a fake profile used to reach out to potential victims. These victims are found through social media, WhatsApp, Tinder or other dating sites. Some are random texts, masquerading as an incorrect number or an old acquaintance. The goal of the miner is to initiate a cordial discussion with the victim, attempting to be their “new friend” or “lover”.

How the scam works

The new friend creates reasons to continue a conversation. This will lead to multiple calls. A relationship slowly develops, inserting themselves into the daily lives of their victim. These calls will continue, attempting to build trust, and they slowly introduce the idea of making a business investment using cryptocurrency. The new friend does not ask for money outright, but rather they employ persuasion. This tactic is used as most individuals realize that someone asking outright for money may be a scam artist. The victim is gradually drawn into what appears to be benign talk about cryptocurrency investments and earnings, but they are really being manipulated to make an investment.

This new friend slowly convinces the victim to invest in cryptocurrency, referring them to a bogus website or app that looks authentic, but is controlled by the scammer. The scam involves having the victim invest small amounts of cash in the beginning, and a modest gain on the investment will be provided. Withdrawals may even be allowed, in an effort to convince them the process is legitimate.

Over time, the investor is persuaded to invest larger amounts on the fake platform, sometimes hundreds of thousands of dollars. Once the money is sent to the fake investment app, the scammer vanishes, taking all the money with them. This can result in significant losses for the victim.

Pig butchering often uses romance as a tactic, but scammers can also build other types of personal or professional relationships. They are trained to manipulate their targets, making it easy for someone to fall prey to this scam.

Red flags to look for

  • Strangers sending seemingly innocuous text messages out of the blue
  • Strangers who quickly try to move the conversation to WhatsApp or another social media site
  • People who avoid video-calling with multiple excuses or flatly refuse to initiate any kind of video-calling
  • People chit-chatting about their insider investment knowledge
  • The URL of the investment platform doesn’t match the official website of a popular cryptocurrency market or exchange but may be very similar
  • The investment app generates warnings of being “untrusted” when launched, or the computer’s antivirus software marks it as potentially dangerous
  • The investment opportunity sounds too good to be true

Tips to follow to protect yourself

  • Don’t send money, trade, or invest with a person you have only met online
  • Don’t speak of your financial position or investments
  • Don’t share personal information or current financial status with strangers
  • Don’t provide your banking information, social security number, copies of your identification or passport, or any other sensitive information to anyone online or to a site that you cannot verify is authentic
  • If an online investment or trading site promotes unbelievable profits, it is most likely that – unbelievable
  • Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast

Consumers must always remain vigilant and alert for scams, especially as new financial products like Bitcoin and other cryptocurrencies become popular. Consumers should research the investments they are considering; avoid people or entities demanding upfront payment in cryptocurrency; be wary of promises of large, quick returns; and refrain from mixing online dating with any investment advice.

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