Pig butchering scam
Type of cryptocurrency-related investment fraud / From Wikipedia, the free encyclopedia
A pig butchering scam is a type of long-term confidence trick and investment fraud in which the victim is gradually lured into making increasing contributions, usually in the form of cryptocurrency, to a fraudulent cryptocurrency scheme.[1] The scammer builds trust with the victim through online communication, subsequently persuading them to invest in a fraudulent cryptocurrency scheme. Frequently, the victim is induced to make further payments before realizing they have fallen prey to fraud. The "butchering" or "slaughtering" of the victim transpires when their assets or funds are stolen by the criminal(s), leading to significant financial and emotional distress for the victim.[2]
This type of fraud originated in Southeast Asia. Perpetrators are typically themselves victims of a fraud factory,[3] lured from abroad under false pretenses and then forced to commit the fraud by organised crime gangs. Those gangs prevent them from leaving and threaten them with violence if they disobey orders. Many operations are run from areas of Myanmar which are outside central government control due to the ongoing civil war, with one important hub being the town of Myawaddy in Kayin State, near the border with Thailand. Many of the gangs running pig butchering scams, along with the people forced to commit the fraud, are ethnically Chinese.[4]
Pig butchering scams are commonplace on social apps, where, in October 2023, twelve percent of Americans using said apps had been victims, up from five percent in 2018.[5] Victims are matched with fake dating profiles and then socially engineered into developing a relationship with the perpetrator, who convinces them to invest in cryptocurrency from websites controlled by the scammers. When sufficient money has been sent, the perpetrator breaks off contact and vanishes.[6] One group profiled in The New York Times focused on (preferably married) Chinese women between the ages of 30 and 50.[4]
The IRS has issued warnings about the rising prevalence of these scams, particularly targeting U.S. taxpayers. The agency notes that losses often reach hundreds of thousands of dollars, with some victims losing as much as $2 million. This trend points to the increasing sophistication of cryptocurrency scammers and the severe financial impact on victims.[7]
Additionally, an investigation into the human aspect of these scams reveals a pattern of coercion and exploitation. Many low-level operators of these scams are often victims themselves, coerced into participating in these crimes under the guise of employment opportunities, only to find themselves trapped and compelled to scam others.[8] This adds a critical dimension to the understanding of pig butchering scams, extending beyond financial loss to encompass human trafficking and exploitation.
The global impact, significant financial losses, and human rights issues associated with pig butchering scams highlight the urgent need for increased awareness, prevention measures, and international cooperation to combat this multifaceted problem.