Pig Butchering Scam: the Cryptocurrency-Fueled Online Fraud

“Sha Zhu Pan” (literally: pig butchering) is the term concoctedd in China for a financial scam which, taking advantage of the cryptocurrency markets, emerged in 2019. Later, this fraud became globally known by its English translation: pig butchering scam.

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mong the different types of online scams, the pig butchering scam is one that develops slowly. Scammers gain the trust of victims through social media or dating apps and eventually convince them to invest in cryptocurrency. Sometimes this process can take months before they gain the victim’s trust and manipulate their behavior. The name of the scam is an analogy to fattening pigs until they are sacrificed 

Offering lucrative deals and playing with delicate materials like flirting and emotions, scammers persuade “pigs” (victims) to deposit significant amounts of cryptocurrency into seemingly legitimate platforms that are actually controlled by the fraudsters. We could say that defining characteristics of the pig butchering scam are the long timelines, the use of dating websites or apps, and the focus on the cryptocurrency market. 

The Process Explained 

The scam often starts with simple social engineering tricks. For instance, locating the victim’s phone number and sending them a seemingly accidental message. Once clarified, the fraudster starts a conversation and introduces details that indicate a certain financial status or position. Once the victim’s trust is gained, the final phase begins: the “fattening” of the pig. 

The fraudsters offer the victim to invest together in a cryptocurrency platform. Initially, they deposit small amounts of money and even allow withdrawals of profits. However, all these deposits are actually redirected to the scammers’ accounts, and they manipulate the situation to increase the amounts gradually. If the victim wishes to stop making transactions or requests a full withdrawal, the fake platform will claim high commissions or create complex procedures. Eventually, all the money will disappear without a trace. 

A Dark Business 

It is important to consider that many times, the criminals are also victims themselves. Particularly in Asia, “scammer farms” have dramatically grown in the last 3 years. Criminal organizations recruit vulnerable individuals with significant debts or difficult family situations to carry out these activities. They offer jobs through fake offers, turning them into their armed force. The new “workers” are forced to conduct intense pig butchering campaigns, and if they fail to achieve certain economic goals, they are beaten or threatened with retaliation against their families. 

How to Prevent It 

To mitigate the consequences of the pig butchering scam and fight against the underlying criminal structure, more than ever, users must be more cautious and responsible. Some tips include: 

• Never respond to messages or emails from strangers that appear to be accidental. If a conversation starts, be suspicious if the behavior becomes too intense or commits too quickly. 
• Avoid installing investment or trading apps without references and especially if a stranger recommends it. 
• Do not invest in cryptocurrencies without doing personal research and having a clear understanding of how they work. 
• Use reliable cybersecurity software as well as strong passwords and multi-factor authentication for email accounts and mobile devices. 

If users find themselves involved in the process, certain clues can help them get out before it’s too late: 

• Be suspicious if the stranger requests deposits to personal accounts or offers to explain how the investment platform works. 
• Verify that the platform or any link provided by the scammer is legitimate. 
• Be cautious of red flags such as excessive investment returns or antivirus alerts about the investment app or platform. 
• Refuse to pay commissions to withdraw money. 

If the stranger disappears for a long period of time or deletes their social media accounts, it is a clear sign that something is not right. If this happens, freeze any activity and report it to the authorities. 

In any case, the responsibility to mitigate the dire consequences of this crime should not solely fall on the users. Social media platforms and dating apps that serve as support for scammers must intensify their commitment to protecting their customers. As the first filter before reaching the victim, these platforms should apply their knowledge in KYC (Know Your Customer) and consider various additional security measures: 

• User authentication with multiple layers of security, leveraging biometric methods or video identification. 
• Clear policies, effectively communicated to users and publicly available, forbidding the promotion of scams and fraudulent activities. 
• Automated detection through automated detection technologies, such as machine learning algorithms, to identify and filter content related to these scams. These systems can analyze posts, ads, and profiles to detect suspicious patterns and take appropriate actions. 
• User reports. Apps and social media should facilitate reporting fraudulent content by users themselves, activating clear options to report suspicious posts or profiles, and an efficient review process to address those reports. 

Unstoppable Expansion 

According to data provided by the Federal Trade Commission (FTC), “romantic” scams are one of the fastest-growing types in recent years. Specifically, cryptocurrency-related frauds account for 19% of all scams. At 34%, cryptocurrencies are the most popular method of money transfer, followed by bank transfers at 27%. 

The pig butchering scam is a multi-faceted fraud that continues to grow, playing on the emotions and vulnerabilities of both the recruiting networks and the ultimate victims. Paying attention to red flags and not investing in cryptocurrency markets without in-depth knowledge, are ways to prevent amplifying the damages caused by this crime.