Crypto News: Investor, beware of 'pig butchering'

Crypto News: Investor, beware of 'pig butchering'

Michael Lusigi

12/14/20223 min read

What is pig butchering?

According to Internet Crime Complaint Center’s press release about online safety, in 2021 ‘pig butchering’ scam victims lost an estimated 429 million dollars.

Pig butchering is essentially a long con. Online scammers take their time to establish fake personal relationships with the victims before ripping them off.

The trick is to get the victims to trust the scammers. A con artist usually creates a fake online profile on social media, like Facebook, WhatsApp, or Tinder masquerading as an incorrect number or an old friend. They use these profiles to reach out to thousands of potential victims attempting to be their ‘new friend’ or ‘potential lover’. If the potential victim ignores the scammer then the con ends there with no loss or foul done, but if they are intrigued by the scammer’s lies and continue engaging then they fall right into the scammer's trap. The con artists will then insert themselves into the daily lives of the victims by consistent personal communication via text messages and phone calls.

After weeks or months, the scammer can be able to know whether ‘trust’ has been established. The victim is gradually drawn into what appears to be casual conversations about cryptocurrency investments and earnings, but they are really being manipulated to make an investment. The ‘new friend’ slowly convinces the target to invest in cryptocurrency and refers them to a fake website or app that looks authentic but is controlled by the scammer. The victims are encouraged to invest small amounts in the beginning and the scammer will make sure to post a modest gain on the investment. They may even allow the victim to withdraw money once or twice to convince them the process is legitimate.

Eventually, the victim is encouraged to invest large amounts of money into the fake website or app - this could be in the hundreds of thousands. Then, the scammer simply disappears with the money.

The idea behind the name ‘pig butchering’ is derived from the process of fattening an actual pig before it is slaughtered.

Potential targets

Anybody can be a victim of the scam, but there are victims who are more vulnerable than others.

  • Empty nesters: These are parents residing alone in a home. Their children have grown up and moved out, either to college or to establish their own homes — thus, emptying the familial housing nest.

  • Middle-aged people living alone: For empty nesters and middle-aged people, scammers prey on their loneliness and their willingness to put more effort into establishing new relationships.

  • People vaguely familiar with the crypto-market: Through conversations, scammers can easily figure out if the victim knows about crypto-investments or not. They are likely to target professionals with limited knowledge of cryptocurrencies with a fear of missing out (FOMO.)

Pig butchering is not exclusively to cryptocurrencies. The same technique can be applied to stocks, or to convincing victims to send gift cards or wire money to help them if they’re in trouble. It has also been called a romance scam or confidence scam, which has existed for a long time. The crypto-spin is just a new way to steal from victims because transactions with crypto are easy and fast.

Look out for these red flags
  • 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 who are chit-chatty 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 help investors avoid pig butchering
  • Don’t take investing advice from people you meet over the internet.

  • If someone claims to have exclusive investment opportunities and urges you to act fast, they are probably trying to scam you.

  • If the person came from unsolicited communication, be skeptical.

  • Don’t talk to people on the internet about your current financial status, especially if they are unknown or untrusted people.

  • If returns for an opportunity are higher than average, or too good to be true, it probably is.

  • Never provide your banking information, Social Security Number, or any sensitive information to anyone online or to a site if you do not know it is legitimate.

Who to contact if you have been a victim of the scam

If you’ve been impacted by this type of scam, there is help available from organizations like the Global Anti-Scam Org and Solidus Labs that offer resources to victims. For those residing in the USA, you can also file a complaint with the FBI’s Internet Crime Complaint Center.

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