‘Pig butchering’ crypto scam: How a wrong text message can swipe out millions of dollars

An old scam is marking returns in the form of cryptocurrency investments, with the potential of wiping out millions of dollars.

Named “pig butchering”, scammers, under this, pose as long-lost school friends or potential lovers and con their victims by building up trust, manipulating them into depositing their crypto assets into fake trading platforms controlled by the perpetrators.

These bogus platforms are designed to look authentic and make the victims believe that their investments are making fantastic returns, until the scammer swindles all their money and disappears.

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The practice has so far been reported in countries like Cambodia, Laos and Myanmar, and most recently in US, where officials at both the federal and local levels have made little headway in recovering stolen funds or catching the perpetrators.

According to an FBI report, the name refers to how scammers “feed their victims with promises of romance and riches before cutting them off and taking all their money.”

An August report by Coinbase, a cryptocurrency trading company, stated that scammers slowly work to convince their targets to move their cryptocurrency away from legitimate exchanges and onto fraudulent websites by asking for a large sum of money up front.

In order to convince them to invest even larger sums of money, these tricksters even give their targets a small amount of money, Coinbase finds.

The scammers also devise various ways to appeal to their target’s emotions, such as asking questions like, “Don’t you want to have enough money for your kids?” Jan Santiago, deputy director of Global Anti-Scam Org, told CNBC Make It.

But when their targets attempt to withdraw their funds, they are told to pay a fee before claiming their money. But more often, the scammers disappear with the stolen funds, which are nearly impossible to get returned.

The FBI’s Internet Crime Complaint Center report states that $429 million was lost to these types of scams in 2021.

But experts believe that one can save themselves from being tricked into investing in fake trading platforms.

“For starters, don’t take investment advice from people you meet on Tinder,” Joshua Crumbaugh, CEO of Phishfirewall and former ethical hacker, told CNBC.

“If the fund/currency/etc. came to you through any form of social media or unsolicited communication, be highly skeptical,” he adds.

He also states that investors should be cautious of higher-than-average returns on investment, “especially if they are able to show you quick returns and you find yourself wanting to invest more money immediately after the initial investment.”

(With inputs from agencies)

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