Rise in ‘Pig Butchering’ Crypto Scams Drains Americans’ Savings

The United States has seen a significant rise in cryptocurrency scams, particularly through a scheme known as “pig butchering.” In these scams, fraudsters engage in lengthy communication with victims, often pretending to form a genuine relationship before convincing them to invest in fake cryptocurrency platforms. The FBI’s 2023 Internet Crime Report indicates that investment scams have surged by 38%, with losses reaching $4.57 billion. Of this total, $3.96 billion is attributed to fraudulent crypto schemes.

These scams are characterized by the gradual building of trust through continuous flattery and false promises. The scam’s name comes from the tactic of “fattening up” the victim before “butchering” them financially. Scammers often present themselves as successful individuals with lucrative cryptocurrency investments.

One such victim, Carina, met her scammer on the dating app Bumble. After six weeks of conversation, she was persuaded to invest $152,000 into what she believed was a legitimate crypto exchange. The website turned out to be a clone of Kraken, a well-known exchange. After realizing she had been scammed, Carina traced the stolen funds to an exchange in Thailand and reported the information to law enforcement. Despite her efforts, the stolen money remains unrecovered.

These scams are often linked to organized criminal networks in Southeast Asia, making it difficult for authorities to retrieve stolen assets due to the international movement of funds.

The increase in crypto-related scams has led to a sharp rise in financial losses for Americans. In 2018, losses from crypto scams were reported at $12 million. By 2021, that figure had grown to $680 million, and in 2023, the total reached around $2 billion. Even with more awareness and security measures, the trend has continued.

Younger adults are disproportionately affected, with those aged 20 to 49 being three times more likely to fall victim than older age groups. Among them, individuals in their thirties have experienced the highest number of losses, representing 35% of reported fraud cases since 2021. The average financial impact varies by age, with individuals in their twenties losing around $1,600, while those in their seventies are losing more than $11,000 on average.

Even as organizations like Chainalysis work to trace stolen funds, the cross-border nature of these scams complicates recovery efforts, leaving victims with little recourse.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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