Often starting with a message on a dating app, social media, or an SMS, and ending with victims losing millions of dollars, pig butchering scams have been on the rise since they took off in China near the end of 2019. In 2021, the FBI stated that its Internet Crime Complaint Center (IC3) received more than 4,300 complaints related to crypto-romance scams (a tactic used for pig butchering scams) causing more than $429 million in losses.
Known in China as sha zhu pan, the scam is called pig butchering possibly referring to the process of preparing a pig for slaughter. The scam involves a perpetrator contacting a target online and building a trusting relationship with them, then gradually persuading them to invest in a bogus scheme, and ultimately stealing their invested money.
Pig Butchering is a multi-layered scam that uses social engineering, fake online accounts, cryptocurrency investment fraud, and forced labour to defraud unsuspecting people of their hard-earned money. In this article, we’ll take a deep dive into this scam.
What happens between the first message and the last lost dollar?
Criminal syndicates behind the scam force trafficking victims from southeast Asia to carry out the elaborate scam by using customized scripts as per the profile of the targeted individual to build a trusted relationship with them and eventually steal their money through fraudulent crypto or investment schemes.
Initial Contact
The perpetrator may have fake social profiles featuring them as an attractive person with an enticing lifestyle. After much research, the perpetrator narrows down a person, the target, often someone who is in a vulnerable position because of having lost a close one, having been diagnosed with a medical condition, having lost their job, and so on.
It may start with a message on a dating app, a message on social media or an SMS from someone who seems to have the wrong number. Something as simple as, ‘Hi, are we on for the meetup this Friday?’. The content of the message is irrelevant as long as it is successful in receiving a response, even if it’s just, ‘Sorry, you have the wrong number.’ After this initial contact, the person behind the scam will initiate conversations on general topics involving hobbies, family, and career until they build trust. In reality, they might be gaining as much information about the target as they can to use it later for manipulation.
Crypto Conversations
Eventually, the perpetrator will casually lead the conversation to finances and cryptocurrency. They could even talk about their gains through the alluded investment scheme and flaunt some of their profits on trading apps or websites. Once, the target is lured in and starts asking questions, the perpetrator will offer to help them with crypto trading for guaranteed returns. To assure high returns, they might even assert that they have insider information or know someone who does.
Money Transfer
The perpetrator will guide the target through the process of investing their finances in crypto trading using apps or websites. The platforms appear legit but are actually fake, or are actual trading platforms like MetaTrader manipulated with plug-ins. The gains would look phenomenal at the start and, in some cases, the scammers would even encourage the targets to withdraw some amount of money to further establish the trust and legitimacy of the scheme.
More Investments
In an attempt to gain as much money as they can, the scammers will encourage the targets to invest more money sometimes by simulating gains on the trading platform and encouraging them to withdraw some of it. At times, when the target seemingly loses money, the scammer will instruct them to put in more money to recover their losses.
Cutting Ties
Once the target is knee-deep in financial losses and is unable to withdraw any of their funds from the trading platform due to claimed issues with the platform, high taxes or fees, the perpetrator will ghost the victim.
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Signs to look out for to protect yourself from falling for a pig butchering scam
Here are some tips that you can follow to protect yourself:
Messages on dating apps, social media or SMS
The scam starts with a text message. Treat every message you receive, may it be on social media, dating apps, messaging apps or SMS, with caution. If you are certain someone has the wrong number, do not respond and block the contact immediately.
If you establish contact with someone on a dating app or make a new friend on social media, avoid mentioning personal details about yourself and your finances. If your romantic interest or friend is especially pushy about carrying out conversations about your private life and money-related matters, treat that as a warning sign.
In 2021, the FBI issued a warning for such romance scams resulting in financial losses of millions of dollars.
Someone you recently met starts talking about cryptocurrency
The FBI’s IC3 published the Annual Internet Crime Report 2022 mentioning that cryptocurrency investment fraud was estimated to be $2.57 billion in 2022.
When new acquaintances, friends, or romantic interests start talking about crypto investments, especially with guaranteed high returns, and having insider knowledge, know that something is fishy. There is always a risk involved with any form of investment, and there are no guaranteed returns.
Note that at times, the ones to suggest a scheme could be someone you trust who themselves are roped up in a scam without their knowledge.
Always research thoroughly about any investment scheme before considering investing. Never put all your eggs in one basket. Finance advisors often tell their clients to diversify their portfolios, which means distributing their investments across multiple channels.
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A new contact talks about teaching you tricks of the trade related to cryptocurrency
If the person you are kindling an online relationship or friendship with suggests teaching you how to trade in crypto and claims to have insider knowledge to give you a guaranteed profit, it may be time to cut off contact and block the person.
Avoid letting someone you recently met guide you through the process of investing in cryptocurrency, or trading. If you want to try your hand at it, make sure to conduct a deep search about how the investment works, the platform or app you are planning to use, and what the risks are. Do not give out details like your credit card numbers, and logins for your bank accounts and investment platforms to someone you recently started talking to, especially online.
If you accidentally gave away your credentials or other confidential information, immediately change your username and password and enable 2-factor authentication if you haven’t already.
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What should you do if you think you are being scammed using pig butchering tactics?
In case, you fell victim to such as scam, immediately follow the instructions given below:
Cut all contact and block the scammer
Without engaging in further conversation or providing an explanation, block the person you suspect to be the scammer on all the platforms you were connected through.
If you have evidence or if the person managed to dupe you of your money, block and report them on the platforms of contact so that they are unable to trick other users. Report them to concerned authorities like local law enforcement and the FBI’s Internet Crime Complaint Center (IC3).
Change your usernames and passwords
To prevent the scammer from causing further damage, in case you shared your login details for your bank account, investment platforms, or crypto-related websites and apps, make sure to change your usernames and passwords immediately, and check whether 2-factor authentication is enabled for all accounts.
Report to higher authorities
File a complaint with your local law enforcement authorities and with FBI’s Internet Crime Complaint Center (IC3), providing all the details and evidence you gathered.
Evidence can include screenshots of conversations, the trading apps and websites involved, names and messages of any other people associated with the scheme, your bank statements showing money transfers, and other relevant details to enable authorities to investigate and help you out.
When reading the news about victims of such scams, people often feel that this would never happen to them. However, the scammers are highly tactful and use such advanced methods of social engineering and manipulation that people often don’t realize what’s happening to them until it’s too late. Given the volume of complaints the IC3 has received and the estimated losses caused by the pig butchering scam, following best practices for safe online interactions, safeguarding your accounts and protecting your confidential details should be a regular part of your life.
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