It’s a twisted game with a chilling name: “pig butchering.” The idea is as grim as it sounds — scammers “fatten” their victims by gaining their trust, often over weeks or months, before swooping in to clean them out financially. It all starts innocently enough. A message pops up on your favorite social media app or dating platform. It could be a friendly stranger, a potential romantic partner, or even someone who claims to share your business interests.
What follows is a carefully crafted performance. The scammer invests time in building what feels like a genuine connection, sharing their “journey” into successful crypto investments. Before long, they introduce their victim to what seems like a golden opportunity — an exclusive investment platform or a crypto exchange promising sky-high returns. The fake platform looks legitimate, right down to fake customer service and glossy dashboards that display fictitious profits.
Victims often get to withdraw small amounts at first, boosting their confidence in the platform. But the moment they try to cash out larger sums, the walls come crashing down. Their funds are locked, the platform disappears, and the “friend” they trusted vanishes into thin air.
According to a 2023 Chainalysis report, these scams have defrauded victims of substantial amounts, with revenues more than doubling from 2022 to 2023. This trend has shown significant growth since 2020 and continues to persist.
“Essentially, the criminal seduces the victim online then gets him or her to make bogus investments in crypto,” says Erin West, a deputy district attorney in San Jose, California.
Why Are Pig Butchering Scams On The Rise?
Cryptocurrency is a perfect hunting ground for scammers, and it’s easy to see why. With a market capitalization reaching $3.82 trillion as 2024 winds up, the industry has become a significant target for scammers. The FBI reported over 69,000 complaints of cryptocurrency fraud in 2023, resulting in losses exceeding $5.6 billion — a 45% increase from the previous year. Add the decentralized, often anonymous nature of crypto transactions, and you have the ultimate recipe for fraud.
The pandemic didn’t help. With millions turning to the internet for work, socializing, and, investing, scammers found a captive audience. Social media platforms, dating apps, and even WhatsApp became fertile ground for these predators. Lonely individuals looking for a connection or quick financial relief became prime targets.
Technology has supercharged these scams. AI chatbots can maintain convincing conversations around the clock, while deepfake videos and manipulated images make scammers seem more real than ever. Even experienced investors find it hard to spot the deception.
“Investigators who do not utilize AI inadvertently give scammers an advantage,” Benjamin Chou, President, Personable and a Forbes Council member, noted in one of his articles.
Regulation — or the lack of it — is another issue. While traditional financial institutions have systems to detect and prevent fraud, the crypto space remains a Wild West. Scammers exploit these gaps, hopping from one jurisdiction to another to evade capture. Meanwhile, economic pressures like inflation and job uncertainty push more people toward risky, high-return investments, creating a wider pool of potential victims.
Impact On Victims And The Crypto Market
For the victims of pig butchering scams, the damage is often life-altering. Financial losses are staggering. Cryptocurrency scams have led to devastating financial losses, with some individuals losing their entire life savings. For example, in 2023, a California man was defrauded of $1.2 million in a crypto scam. The money is usually gone for good, funneled through anonymous crypto wallets or offshore accounts.
The emotional toll is just as brutal. Victims often feel deep shame, blaming themselves for being “naive.” This guilt prevents many from seeking help or reporting the crime, leaving scammers free to strike again. Relationships can also crumble under the weight of financial stress and betrayal. Families are torn apart, businesses collapse, and mental health issues like anxiety and depression skyrocket.
In some cases, the consequences are fatal. Stories of victims contemplating or even attempting suicide are tragically common. The ripple effects of these scams extend beyond individuals. They erode trust in online communities, discourage genuine investment, and tarnish the reputation of crypto as a legitimate financial tool.
“It is a long con that’s really laser-focused on taking every penny from the victim; that’s why we’re literally seeing suicides. We are seeing people checking themselves into psychiatric facilities,” says West.
It’s not just individuals who suffer. These scams are a gut punch to the entire crypto ecosystem. Every high-profile fraud story makes headlines, feeding public distrust in cryptocurrency. New investors hesitate to enter the market, and existing users grow wary of even legitimate platforms. This creates a chilling effect on crypto adoption.
Reputable crypto exchanges aren’t spared. Users start questioning the security of even the most established platforms, leading to reduced trading volumes and user activity. This erosion of trust can slow down the market’s growth and stifle innovation.
The financial impact is monumental. According to the 2023 Crypto Crime Mid-year Update by Chainalysis, cryptocurrency scams generated approximately $1 billion in revenue through June 2023, reflecting a 77% decrease compared to the same timeframe in 2022. This is more about lost opportunities than it is about stolen funds. Developers, startups, and investors who rely on a thriving market to build new technologies are left reeling.
Regulators are stepping in, but their actions often come with a heavy hand. Increased scrutiny and tighter regulations may deter scammers, but they can also hinder innovation and drive legitimate projects out of certain jurisdictions. Meanwhile, companies like Chainalysis are working overtime to trace stolen funds and identify scam patterns, offering a bright sky of hope for a safer future.
“We’ve seen time and time again that these cases can actually be solved, and they can be solved at a pace and acquisition that is way better than what we’ve seen in the past,” highlighted Gronager, then COO at Kraken.
Look Before You Leap!
Stopping pig butchering scams starts with awareness. Recognizing the red flags — unsolicited messages, too-good-to-be-true investment promises, and high-pressure tactics — is very important. If someone online suddenly becomes your best friend or romantic interest while pushing an investment, it’s time to hit pause.
Crypto users need to verify platforms before investing. Look for reviews, regulatory licenses, and robust security measures. Avoid sharing sensitive information online, and never rush into an investment, no matter how promising it seems.
Platforms are stepping up their game, too. Major exchanges like Coinbase have rolled out scam awareness initiatives and stricter verification processes. Law enforcement agencies are also collaborating internationally to track scammers and recover stolen funds, though the global, decentralized nature of crypto makes enforcement an uphill battle.
On a personal level, the best defense is skepticism. If a deal sounds too good to be true, it probably is. Share knowledge with friends and family to help them avoid falling into the same traps. The more people are informed, the harder it becomes for scammers to operate.
Pig butchering scams represent the darker side of cryptocurrency — a space that promises financial freedom but can also be a playground for fraudsters. These scams thrive on trust, technology, and human vulnerability, leaving victims devastated and the industry bruised.
But it doesn’t have to stay this way. By staying informed, educating others, and demanding stronger safeguards from platforms and regulators, we can fight back. Awareness is the first step in reclaiming crypto’s promise as a force for good. Together, we can ensure these scammers don’t get the last laugh.
Author: Ayanfe Fakunle
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organisations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
