U.S. authorities are warning about a cryptocurrency scam known as “pig butchering” that is growing in popularity at alarming rates.
Lakewood Police Public Information Officer John Romero detailed:
Pig butchering is basically when a farmer fattens up the pig before slaughtering it. In this instance, the suspect was fattening their victim.
According to the police officer, the pig butchering fraud usually begins on social media sites such as Linkedin and Tinder. The scammer then convinces the victim of the need to pay some money. The scammer then deposits the money in a cryptocurrency account that appears to be growing in value. This makes the victim want more funds. The scammer then vanishes along with large amounts of victim’s cryptocurrency.
One victim of the scam claimed that he was initially able to withdraw a few coins from his crypto account. He thought everything was fine until he got a message saying that he needed to deposit more than $204K to access his account.
Shawn Bradstreet, U.S. Secret Service Special Agent, commented:
They [victims] begin to see how easy it can be to invest and they start seeing a rise in the screen account. Then they end up investing all of their life savings within days.
He said, “The fake sites can appear legitimate, but the money goes straight to the criminals.”
The Global Anti-Scam Organization, a non-profit organization based in Singapore, is available 24 hours a days to assist victims of pig slaughtering. Grace Yuen, a spokesperson for the organization from Massachusetts, said:
There is a growing number of victims coming from the Bay Area. This scam is getting more sophisticated, with fake platforms being created imitating legitimate crypto-trading websites.
Federal Bureau of Investigation (FBI), April, stated: “The fraud is named after the way that scammers feed their victims with romance and riches before cutting off their heads and taking all of their money.” The law enforcement agency also added:
The scammers are part of a fraud ring that mines social media and dating apps for victims.
Last week, Coinbase, a Nasdaq-listed cryptocurrency exchange, warned of Sha Zhu Pan (pig slaughtering) investment scams. Coinbase is seeing a disturbing increase in fraud cryptocurrency investment platforms that source victims via connections through dating apps and social networks. The exchange advised its users to be aware of this scam and warned them not to fall for it.