Despite its extreme name, these types of scams have nothing to do with swine. They are a growing threat, contributing to a steep rise in cryptocurrency investment losses in recent years. In a pig butchering scam, bad actors initiate conversation via social media, dating apps, or text, and slowly build a romantic relationship or friendship with you. Once trust has been established, the fraudster lures you into a crypto scam — pocketing money you “invested” in the digital currency.
Pig butchering scams have nothing to do with four-legged farm animals; rather, they are sophisticated ploys that combine romance scams with cryptocurrency fraud.
Pig butchering scams originated in Southeast Asia, where they are known as “Shāz Hū Pán,” a Chinese phrase that translates to “pig butchering.”
Unfortunately, these scams are being carried out worldwide at an alarming rate.
According to the Federal Bureau of Investigation (FBI), Americans lost $3.31 billion to investment fraud in 2022. This most recent Internet Crime Report shows that the majority of those investment losses ($2.57 billion) were a result of crypto scams, which include pig butchering ploys, and that Americans between the ages of 30 and 49 have been hit hardest.
What is a pig butchering scam?
These ploys often begin as romance or “confidence” scams, with a fraudster initiating an innocuous conversation with you through social media, dating apps, text, or WhatsApp. That could look like a flirtatious hello on a dating app or an “accidental” text to a wrong number, followed up by friendly chit-chat.
Slowly but surely, the fraudster “fattens the pig” over the course of days, weeks, or even months. They often catfish (or fake a persona using stolen photos and phony personal information) and make pleasant conversation.
Once a romantic or platonic relationship has been established, the fraudster recommends investing in cryptocurrency.
Sometimes the scammer pretends to be a cryptocurrency investor from the start. Other times, they spontaneously claim to have discovered a “can’t-miss” investment opportunity.
Either way, the end goal is the same: steering you to a fraudulent cryptocurrency investment site — which typically looks deceivingly legitimate — to deposit funds into an account that’s owned by the scammer.
What’s especially tricky about this type of scam is that the fraudsters are often very patient. They’ll engage in daily small talk to establish a trusting relationship and may even recommend investing a small amount of money into the crypto site to start or go as far to deposit money into your bank account to show that your investment is “legitimate.”
Once they’ve established your trust, they push you to deposit large sums of money (sometimes entire life savings) into the fake investment, at which point they “slaughter the pig,” stealing your money.
Red flags of pig butchering scams
Because of this scam’s multi-pronged and prolonged approach, there are several red flags to look out for:
Unsolicited messages. Be skeptical of someone unknown to you who initiates conversation via text, WhatsApp, or social media out of the blue, even if they’re being friendly.
Refusal to video chat or meet in person. If you’re establishing a relationship with someone you met through a dating app, be wary if they won’t participate in face-to-face contact.
Pressure to invest. Do not be persuaded by any pressure — whether it’s passive or direct — to invest in cryptocurrency or another form of investing without investigating it for yourself.
Questions about your investing habits or financial status. Any excessive prodding about your financial situation or current investments from a stranger or someone you’ve only met online should sound alarm bells.
Too-good-to-be-true investment opportunities. If a person is touting an investment opportunity as “risk-free,” “a sure thing,” “guaranteed,” “extremely low risk,” or “extremely high yield,” or anything that seems too good to be true, it likely is.
What to do If you fall victim to a pig butchering scam
Should you be lured into a pig butchering scam, it’s vital to report it immediately.
While there are rare instances (like this 2023 case in Los Angeles) in which law enforcement can track down crypto scam rings, recover stolen funds, and return them to the victims, crypto scams are notoriously difficult to recover money from.
Regardless, report the fraud to your bank as well as to the Federal Trade Commission (FTC), the FBI’s IC3, and your local law enforcement as soon as possible.
It’s best to avoid getting tangled in a crypto scam in the first place. If you’re an Allstate Identity Protection member, give us a call using the number on your account dashboard whenever something seems fishy. Our specialists are available 24/7 to answer any questions you may have and help you tackle the next steps.
