The newest trend in crypto scams involves finding a victim, gaining their trust, and convincing them to invest into a fake cryptocurrency site. Find out how one man lost $1.2 million.
Scammers today are relentless at trying to take everything from your bank account. They take advantage of lonely people desperate for a friend. The latest trend shows how far a scammer will go. It’s called “pig butchering.”
The reason for the name is that the scammer builds a relationship with the victim — “fattening the pig”, gaining their trust and then persuading the victim to become an investor in cryptocurrency on a fake website. (Source: CNBC)
“In 2021, the FBI’s Internet Crime Complaint Center received more than 4,300 complaints related to crypto-romance scams, resulting in more than $429 million in losses.” (Source: FBI.gov)
Pig butchering preys on the lonely and is happening at an alarming rate in the United States, and the targets are more often than not single men on dating websites, but it can happen to women and the elderly as well.
The only good news is this scam has nothing to do with real pigs, and this article does not discuss harming our cute little farm friends.
How Pig Butchering Works
Here’s how the scam works:
The victim can be found in many ways, on a dating website, on social media, or by random texts. The method described below is if the scammer is using text messages to find a victim.
The scammer texts phone numbers via SMS or WhatsApp until they find someone that responds. The scammer is looking for a “nice person” willing to respond to the texts. If someone responds, then that person might be willing to be friends with a stranger.
After finding a person that responds, then the scammer starts their script.
The introduction proceeds, where the scammer may talk about their successful business, such as their makeup company. After their introduction, then they want the same from the victim. Name, age, occupation, etc. to see if their victim has a good salary.
The scammer continues to send texts, working hard to build trust with the victim. They may say that this meeting was fate and they are hoping to develop an emotional connection with the person.
As an example, the scammer will send a photo of an attractive woman, if they met a single man on a dating app or website. The scammer will ask for a photo exchange, to see what their victim looks like if they don’t see it already on a profile, or on WhatsApp.
After some time has been invested with the victim, the scammer will eventually try to find out if the victim has any investments, such as in cryptocurrency, or money in savings accounts.
At some point, the scammer will ask the victim if they want to earn money by making an investment into their business or some investment that requires buying into a cryptocurrency. They may attempt to steer the victim to a phony website or app that appears to be making incredible investment returns, but it is all smoke and mirrors. Once the victim’s money is sent, it is gone.
If the victim asks too many questions or starts to suspect they are talking to a scammer before the con happens, the conversation ends and the number becomes unavailable. The number used by the scammer is often spoofed over the internet or with an app and is not tied to a cellphone carrier.
Whether the scam is a success or it fails, the scammers building the relationship with the victims often get away anonymously only to find their next victim.
San Francisco Man Becomes a Victim of Pig Butchering, Loses $1.2M
ABC7 News reported on a San Francisco, CA man with a financial background first met the scammer in October 2021 on WhatsApp. He initially thought she was an old colleague, from a previous job, and she identified as “Jessica.”
“She gained my trust. I was vulnerable at the time with my dying father.” -San Francisco man
They began to text frequently, every day for a month. She knew he was dealing with a dying father, and that’s when she started the scam. She presented him with an opportunity to earn some money by investing in cryptocurrency to help with funeral expenses.
He agreed cautiously and she steered him to a real-looking crypto trading website, that she told him went to a platform to make trades of his real money into the cryptocurrency. She also sent him an app to track his progress.
“I have a financial and accounting background, so I was being careful…I started with $5,000, $10,000 just to see how it is.” -San Francisco man
The San Francisco man thought the website and app were legitimate, but they were all fake.
ABC7 News reported “Four days after his father died, the man lost his first $500,000. But, the alleged scammer insisted he could make the money back.”
“I still believed it was real,” the San Francisco man said. “She encouraged me to buy more capital to get it back.”
He then borrowed $100,000 from his brother-in-law and took out a loan for $200,000 more. No matter how much money he poured into the fake crypto trading website, it didn’t matter. He was never going to get any of his money back.
“On Dec. 3, I lost it all.” -San Francisco man (the scam victim)
The man lost a total of $1.2 million USD, after draining his entire life savings, including his daughter’s education fund.
“It’s just been a nightmare…Stay away from cryptocurrency.” -San Francisco man (the scam victim)
After the scam, the man admitted himself into a hospital, and hopefully received help for his emotional state after the devastating ordeal.
(Source: ABC7 News)
According to Special Agent Shawn Bradstreet, pig butchering scams have tripled in the state of California in 2022.
“Once they see how easy it is to invest, they see a rise in their screen account and then they end up investing their entire life savings in a matter of days. The counterfeit sites used can look legitimate, but the money is going straight to the criminals.” -Shawn Bradstreet, U.S. Secret Service Special Agent
(Source: ABC7 News)
FBI Tips to Prevent Falling Victim to Pig Butchering
The FBI gives essential tips on how to stay safe from pig butchering scams:
- “Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.
- Don’t talk about your current financial status to unknown and untrusted people.
- Don’t provide your banking information, Social Security Number, copies of your identification or passport, or any other sensitive information to anyone online or to a site you do not know is legitimate.
- If an online investment or trading site is promoting unbelievable profits, it is most likely that — unbelievable.
- Never send money, trade, or invest based on the advice of someone you have only met online.
If you are the victim of any online fraud, you should report the incident to the FBI’s Internet Crime Complaint Center at www.ic3.gov or call your FBI local office.”
DeVon, Cheyenne. “Got a text from a wrong number? It could be an attempt at ‘pig butchering,’ a crypto scam costing investors millions.” CNBC. 25 August 2022.
“FBI Oregon Tech Tuesday: Building a Digital Defense Against a New Cryptocurrency Scam: Pig Butchering.” FBI.gov. 5 April 2022.
Sierra, Stephanie. “Bay Area investor loses $1.2M in crypto scam as fraud cases triple across CA.” ABC7 News. 27 July 2022.