Ernie Fenwick, a 35-year-old woman, joined Tinder in search of love. And as she got to know “Marcin”, a charming young man interested in bitcoin trading, sparks started to fly. Soon after meeting each other online, Marcin persuaded Ernie to contribute some of her recent inheritance to his trading partners. She had $10,000 when she began. Then $186,000. Later several transfers totaling six figures followed, all of which went to Marcin’s “exclusive” investing platform.
Yet it was all a part of the pig butchering scam, one of the world’s fastest-growing scam kinds. By the time Ernie learned she was a victim, her inheritance had already been depleted of $8 million.
Over the past five years, the percentage of Americans who have used dating apps and undergone pig slaughtering has increased from 5% to 12%
Learn the warning signs of pig butchering scams so you may avoid falling victim before investing in any new cryptocurrency platforms or taking trading advise from a friend or online love interest.
How Does The Pig Butchering Scam Work?
In the pig butchering scam, fraudsters entice victims into online connections to gain their trust before persuading them to invest in bitcoin exchanges.The sites are controlled by the scammers, who would eventually take all the money and disappear without informing the victims.
Pig butchering scams, which get their name from the Chinese word Shāzhūpán, are long-term con jobs that incorporate elements of bitcoin fraud, investment scams, and romantic fraud.
A pig butchering scam works like this:
- The con artist, or “host,” contacts the target using social media, a dating app, or by texting the incorrect number.
- Hosts maintain frequent contact to build a bond once they identify a suitable prey, the archetypal “pig.”
- The host tempts the victim to begin trading cryptocurrencies after gaining their trust. The host will assert to have family connections or insider knowledge of the investment world and explain that huge profits are typical.
- The presenter then prods the victim to download an app and offers to trade with them to demonstrate how simple it is to get money. Yet it’s a bogus website run by a group of con artists.
- After the victims sign up for the platform, the host simulates trades to make it appear as though they are making money. In order to boost the victims’ confidence, the host might even advise them to remove some of their “gains.”
- Believing everything to be legitimate, victims invest increasing amounts of money. The host keeps tricking the victims (as well as the platform) over time to keep them investing. Prior to a metaphorical slaughter, this process is referred to as “fattening the pig.”
- When victims attempt to withdraw their money later, the platform will either claim that there is a problem with their account or tell them that they must pay exorbitant fees and taxes in order to do so.
- Finally, the victim comes to grips with the truth, and the fraudster (as well as the platform) vanish. While recovering the funds is not impossible, it not as easy as just asking strangers because the blockchain is where all transactions take place, instead you report the fraud to a legal team of fraud analysts and forensic experts.
How To Protect Yourself From Pig Butchering Scams
The state of Delaware took action in September 2022 in response to the growing number of pig slaughtering frauds. Three organizations and people linked to these cryptocurrency frauds had their accounts frozen by the state’s Department of Justice (DOJ)
Although this is a positive development, the risk of pig butchering frauds still exists.
Here are six precautions you can take:
- Never divulge sensitive information, such as your Social Security number (SSN) or banking information, to somebody you have only met online.
- Never give cash or cryptocurrencies to somebody you haven’t met in person or who you don’t know well.
- Never download an app or join any investing site at the urging of someone you have only met online. Even though it appears to be genuine, it can actually be a phony software that con artists are using to make you believe you’re making money.
- Keep in mind that “guaranteed returns” do not exist. Never trust anyone or any investment site that makes returns or minimum investment requirements.
- If you don’t fully comprehend how cryptocurrencies operate, refrain from investing. You should avoid using the platforms if you require continual direction from someone.
- Before you participate in any exchange, app, or investing platform, do some research online to find out about any third-party reviews and recognized scams. Check the Better Business Bureau’s (BBB) scam tracker (or public discussion boards like Reddit) for reports of scams involving particular platforms.
Can You Get Your Money or Crypto Back After Pig Butchering Scams?
The likelihood of recovering your money from a pig butchering fraud is regrettably small to none, unless you have kept concrete record of your transactions which includes track of dates, amounts, and addresses of all cryptocurrency transactions. This helps recover lost or stolen cryptocurrency. Fraudsters utilize cryptocurrencies because it’s so difficult to monitor or get your money back once you’ve transferred it.
Even worse, numerous individuals are repeatedly re-targeted by so called “crypto recovery firms” that declare to assist victims in recovering their losses. Nevertheless, a lot of the time these businesses are scammers that use refund scams to attack victims again when they are weak.
While there are rare instances of victims getting their money back, these are insignificant in light of the billions that have been lost. For instance, Binance recovered almost $318,000 worth of cryptocurrency earlier this year. The first time that police were able to recoup any losses from crypto-romance frauds was through this confiscation, that being said, it is crystal clear there is only little the authority and police can do to help victims of cryptocurrency fraud. In the light of events such as pig butchering, overcoming this obstacle relies on a robust blockchain analytics report clearly setting out the context of the fraud.
Victims of fraud are not always able to fund complex recovery actions, and so funding for professionals working on an ‘at risk’ basis may be required, or a combination of both.
Finally, more practical impediments can include hiring a reputable financial company with such investigative capabilities as Melmac Solutions Limited with an approach which involves using blockchain analytics in tracing the movements of the assets and using attribution technology can identify whether wallets are known to be associated with particular types of fraud or with exchanges; identifying the location of exchanges and being able to exert sufficient leverage to obtain their cooperation in freezing assets, disclosing information or satisfying third-party debt orders in this space, has required some creative thinking.