Pig butchering scams involving crypto are big business with victims losing millions of their hard earned cash each year to the fraudsters.
The meaning of a pig butchering scam in crypto is when a victim, also known as the pig, is fattened up by scammers who use a variety of methods to gain their trust before tricking them into handing over large amounts of Bitcoin, Tether or other cryptocurrencies, hence being butchered.
Unsuspecting victims are often contacted directly through social media channels such as Telegram or WhatsApp, or dating websites by people who present themselves as a new friend or potential love interest in a similar vein to a romance scam.
Sometimes the scammers simply spew out thousands of messages to email lists they’ve acquired of potential targets who may be susceptible to the scheme.
The scammer, who’ll be using a fake name and identity, often with a stolen picture of an attractive person, works to quickly establish a relationship with the mark.
Conversation turns to crypto investing
After a few weeks they’ll introduce the subject of investing into the conversation and tell the victim about a fantastic opportunity that they know off which offers quick and easy profits of eye-watering proportions through crypto trading, options or similar.
They’ll sometimes show the victim social media groups featuring other investors who are already taking advantage of this money making machine and are swapping messages about their success and how lucky they are to be one of the chosen few.
Victims often feel pressured to invest as they don’t want to appear as if they don’t trust their new friend who they believe they’ve built a relationship with, even though they don’t fully understand what they’re investing in.
In many cases they’re also blinded by greed and it’s at this point that the victim decides to go ahead and make an initial investment.
They’re usually asked to open an account on a legitimate cryptocurrency exchange, such as Binance, before transferring their investment cash to the platform and converting it into cryptocurrency such as Bitcoin or a stablecoin such as USDT.
Once they have crypto in their legitimate account, they’re asked to transfer it to another address operated by the scammers who claim it’ll be invested in the get rich quick, can’t lose scheme.
Crypto ‘profits’ quickly grow
Shortly afterwards the victim will see their profits soar. At this point they’re encouraged to invest more in the once-in-a-lifetime opportunity, which many victims unfortunately do.
However, the profits are completely fictitious, as is the evidence that the scammers provide to prove the investment is real.
This includes fake statements, fake deposit insurance certificates purporting to be from well-known insurance firms, and spoofed crypto addresses which appear to hold the victim’s new-found riches but in reality have zero balances.
Further growth will continue to appear in the victim’s account and it’s often at this point that they decide they want to cash out some of their new found wealth.
But it’s at this stage of the pig butchering scam that the problems start.
Scammers demand ‘fees’ or ‘commissions’
In most pig butchering crypto scams when the victim tries to withdraw their funds the crooks tell them that there’s an unexpected problem with releasing the cash and that a further ‘tax’, ‘commission’ or ‘service charge’ needs to be paid before the funds can be transferred.
Less commonly, the scammers simply vanish and the platform or app is shut down.
There are many variants of the fake fees demanded by the scammers at the point the victim comes to withdraw their ‘profits’, with the examples above being the ones I’ve heard about most often.
Occasionally the scammers do allow the victim to withdraw a small amount of cash before swooping in with larger demands, but more often than not they are frozen out of their funds completely.
I’ve also heard of victims being told that they need to pay Capital Gains Tax on their fake profits to the scammers before they can get their money back. In the UK this tax is only ever paid directly to the Government via HM Revenue & Customs (HMRC).
Others have been told to pay Income Tax – again, in the UK this is paid directly to HMRC and would never be paid to a third-party organisation or company.
Further demands follow each payment
If the victim pays the additional fee(s), the scammers will come back with fresh demands and continue this on repeat until the victim is bled dry or decides to stop paying.
Pig butchering scams often run over several months and can involve fake websites, mobile apps, phone numbers and multiple scammers who claim to represent different departments within the fictitious investment company.
The scammers may claim that they have offices around the world and even provide addresses. Sometimes these are simply plucked from thin air, while other times they might be a PO box number which may or may not have any connection with the crooks.
Once the victim has lost all their cash they are considered to have been slaughtered – or pig butchered – hence the origin of the name, which was first thought to have been used in connection with scams originating in China.
How can you tell a pig butchering scam?
I’ve spoken to many victims of so-called pig butchering crypto scams and while I have the utmost sympathy for them, I do sometimes wonder why they handed over such large amounts of money without carrying out any real checks on who they were giving it to.
We’re all susceptible to a bit of flattery, especially if we’re single and in the market for romance. But firing off tens of thousands of pounds or dollars in crypto to someone you’ve only met a couple of weeks ago online takes it to another level.
Of course people have different levels of financial education, but search engines are there to help check the validity of a company or investment before piling in with your life savings.
So, if you’re wondering how you identify a pig butchering scam, searching online and reading comments from other people who might have used an investment platform you’re considering is a good place to start.
Because pig butchering platforms tend not to stay live for long, the scammers often put very little effort into creating them.
This makes it much easier for would-be investors to spot the fake platforms and is another reason why it’s crucial to take a deep dive into a site and its history before parting with any cash.
There are also a number of simple checks you can perform which will help you understand whether a site is legitimate or not.
They take minutes to do and could save you tens of thousands in the long run, together with untold stress and upset.
Simple things such searching for reviews online or even looking up the age of the domain of the investment website can all quickly reveal which platforms are legitimate or not.
To find out in detail how to check out a site read my ultimate guide and checklist to spotting a crypto scam.
Pig butchering scam stories
I’ve lost count of the number of pig butchering scam victims that have contacted me, but I’ve created a list of some of the crypto scam websites involved here.
They all follow a very similar pattern, with many victims left distraught at the end, especially if they’ve spent their life savings or borrowed money from friends and family to pay the fresh demands from the scammers in the hope that they’ll eventually get their money back.
Here are a couple of examples of people who’ve been victims of a pig butchering scam who’ve I’ve spoken to.
Case study 1 – The Couple
I was contacted by one half of a couple in their fifties who’d lost everything after being caught up in a pig butchering scam.
And when I say everything, I mean everything. Their life savings, the proceeds from the sale of their home and money borrowed from family members. All told the total loss was in the region of £300,000 ($361,000).
The other half of the partnership had heard about the ‘investment opportunity’ online involving a site called Trezor Trust (which uses variants of the same name) and decided to take the plunge with a small amount of cash to see how it worked out.
As per the pattern, they saw their initial investment soar in value in a short space of time and wanted to take advantage of what they thought was an incredible opportunity.
They soon started piling in larger chunks of money – each time seeing their ‘profit’ grow exponentially.
At times they grew nervous about the amount they’d committed to the investment, but were shown ‘insurance certificates’ to prove it was safe and contacted by multiple members of the scam group to reassure them that all was in order.
However, there were numerous red flags along the way. Most significantly, a couple of their banks warned them about the transactions they were making when they transferred cash to crypto exchanges and ultimately closed their accounts.
But it still took them a while before they grew suspicious and attempted to withdraw their cash, which by now, according to their fake account, had ballooned to nearly £580,000 ($700,000).
But predictably the scammers explained there was a problem transferring their funds and began making a series of bizarre demands for Capital Gains Tax, Ethereum mining fees and other invented costs in order to release the cash.
Unfortunately, the couple parted with tens of thousands of pounds more until their entire savings were exhausted. At this point the scammers even suggest one half of the couple ask their mother to re-mortgage her house in order to pay additional fees.
They stopped short of doing this, but were left virtually destitute by the scammers, who continued to contact them until they broke off any further communication.
It was clear that the couple did not understand cryptocurrency, or investing in general. They were also unaware of how certain taxes work or how legitimate financial institutions operate.
A quick Google search would have revealed the site to be a scam as other victims had written about it previously and this only underlines how important it is to properly research any company you’re planning to transact with.
Incidentally, Trezor is the name of a legitimate cryptocurrency hardware wallet producer. Scammers often attempt to capitalise on the names of respectable companies, with TripAdvisor being another brand frequently used by the crooks.
Case study 2 – The Divorcee
This person had been frequenting dating websites and had been contacted by a person claiming they were a single lady with a romantic interest in him.
The scammer gradually befriended the victim and built up his trust over a number of weeks before telling him about an amazing crypto investment opportunity where he could nearly double his money in a month with no risk.
Despite the victim having considerable business experience, he still parted with more than £10,000 ($12,000) as an initial investment as he felt like he knew his new love interest well enough and thought of her as a good friend.
However, shortly after he transferred the crypto he became suspicious because he’d spotted a typo in the domain name which didn’t quite match the name of the platform he was ‘investing’ through.
The name of the platform was Coin Avatar Pro, and it had a companion app and WhatsApp group which appeared to have several members who were all successfully investing.
I explained that he’d been caught up in a scam and urged him not to part with any more cash which fortunately he didn’t do, but he took some convincing as he was sure that his investment would be returned, believing that the scam was perhaps a form of Ponzi scheme and not outright theft.
Ultimately the site went offline and the scammers disappeared, but it was a harsh lesson for the victim who, as a more mature person with plenty of life experience, should have perhaps carried out more research into what he was investing in.
How to avoid pig butchering scams
There are often many tell-tale signs that you might be involved in a scam so you should always keep your wits about you when asked to engage in any investment activity.
As I’ve said, most pig butchering scams involve people being approached and befriended by strangers before being offered a fantastic, risk-free investment opportunity.
It’s here that you should stop and think. Do you really know who this person is? Why would they offer you this opportunity? If such an opportunity did exist, why isn’t the person a) keeping it to themselves b) the whole world doing it and making millions?
Okay, some people have been extremely lucky with crypto investing, but most of us can expect fairly modest returns from our portfolio, whether in the crypto world or in traditional stocks and shares.
It’s also important that you never invest in anything you don’t understand. You may be caught up in a whirlwind of FOMO but it’ll only end in tears, especially in the crypto space which is still largely unregulated and thus lacking many of the protections offered in the traditional finance sector.
I’ve also mentioned that the scammers often set up very poorly designed websites and apps with content and images scraped from other, legitimate sites.
Think to yourself, would a legitimate financial institution have a website or app like this? Check out your bank’s website then compare it to a scam platform – even a cursory glance will tell you they’re worlds apart.
These are just a few ways of spotting a pig butchering scam and avoiding them. For more, read my ultimate guide to spotting crypto scams.
Can I get my funds back from a pig butchering scam?
This is a question I get asked several times a week by people desperate to secure the return of their cash.
There’s no doubt it’s a challenging thing to attempt, but there are companies that claim to be able to assist you which I’ve written about here.
Keep your expectations low though as scammers use a variety of methods to cover their tracks and stay one step ahead of the law.
Cryptocurrency scams can take many forms, including Ponzi schemes, phishing attacks, fake exchanges and investment opportunities.
It’s important to be cautious when dealing with cryptocurrency and to do your research to ensure that you are not falling victim to a scam and that the platform you’re planning to invest on is legitimate.
Even if you are investing on a legitimate platform it’s crucial that you use secure passwords and two-factor authentication, and make yourself aware of common tactics used by scammers to steal your personal information and hence your crypto.
Typing the name of the platform followed by ‘review’ or ‘scam’ into a search engine will often bring up helpful information written by others who will help you decide the legitimacy of the platform you’re planning to use.
If you suspect a site is fake, get in touch.