Overview of "Pig Butchering" Scams
The U.S. Federal Trade Commission (FTC) has issued a warning about an increase in "pig butchering" scams, which involve cryptocurrency investments. Originating in Southeast Asia, the term describes a long-term scam where fraudsters gain victims' trust through online connections, often via dating sites and social media. After building a relationship, scammers gradually encourage victims to invest in fake crypto schemes, eventually stealing their money.
How the Scam Works
Scammers target individuals seeking friendships or relationships, leveraging emotional connections to make victims more susceptible to investment pitches. The fraudsters often pose as knowledgeable crypto investors, convincing victims to invest significant sums. Once trust is established, the scammers quickly extract funds, directing victims to use payment methods like gift cards, Apple Pay, CashApp, PayPal, and cryptocurrencies.
Financial Impact and Warnings
The FTC highlighted the severe financial losses caused by these scams, with some victims losing tens of thousands to millions of dollars. The agency urges caution, especially with online contacts who solicit money or investment opportunities.
Increase in Crypto Scams Globally
In May, the Canadian Anti-Fraud Centre (CAFC) also reported a surge in crypto scams targeting Canadians, including "pig butchering" and investment frauds. A notable case involved Shreya Datta, a 37-year-old tech professional from Philadelphia, who lost $450,000 to a crypto scam. TRM Labs, a blockchain intelligence firm, noted that the FBI's Internet Crime Complaint Center (IC3) received over 4,300 complaints related to "pig butchering," with cumulative losses exceeding $400 million.
Need for Awareness and Vigilance
Given the rise in such scams and the substantial financial losses involved, it is crucial to increase awareness about "pig butchering" and other online frauds. People should be wary of online contacts requesting money or investments.