More and more Americans are losing thousands of dollars to a scheme that takes fraudsters weeks or months to pull off. The strategy, known as “pig butchering,” has amassed billions in stolen funds—particularly in the form of cryptocurrencies. Losses from investment scams soared 38% to a new record high in 2023, according to the FBI’s Internet Crime Report. Of the $4.57 billion in funds reported stolen, $3.96 billion involved fraudulent crypto investments.
Victims of pig butchering scams often report meeting their scammers through social media platforms or dating apps. The scammers then use flattery and fake bonding to gain their victims’ trust before convincing them to invest in cryptocurrencies. In some cases, the scammers may claim to live a lavish lifestyle and invest heavily in cryptocurrencies in order to gain their victims’ trust.
The scammers typically use websites designed to mimic legitimate crypto exchanges in order to facilitate the transactions. In some cases, the scammers may also use forced labor in Southeast Asia to launder the stolen funds. Despite efforts by blockchain firms like Chainalysis to track down millions in stolen crypto, the multi-jurisdictional footprints of these cases creates a hurdle for law enforcement to seize the stolen funds.
According to a report from the United Nations, pig butchering scams are often conducted using forced labor in Southeast Asia. Law enforcement officials are working to combat these scams, but the sheer scale of the problem and the use of forced labor in some cases makes it a challenging task.
In 2023, a victim of pig butchering reported meeting her scammer through a dating app and losing $152,000 to the scam. The scammer convinced her to deposit the funds on a website designed to mimic the legitimate crypto exchange Kraken. The victim eventually traced her funds to an exchange in Thailand and handed the details over to law enforcement, but the stolen funds have not been recovered.
The problem of pig butchering scams is ongoing, and law enforcement officials are working to raise awareness and prevent further losses. In the meantime, victims of these scams are left to pick up the pieces and try to recover from their losses.
