The pig butchering scam is a fast-growing and extremely destructive form of cryptocurrency fraud. It involves scammers gradually building trusted relationships with their victims before encouraging them to contribute to fraudulent investment schemes.
A recent investigation identified 168 UK companies operating fraudulent crypto or foreign exchange trading schemes – half of which are thought to be pig butchering scams. These scams are estimated to have cost victims as much as $75 billion globally.
If you’re a crypto investor, it’s essential that you know how this scam works and can recognise it easily. In this post, we break down the scam step-by-step and show you how to identify it.
What is Pig Butchering?
The pig butchering scam first emerged in China in 2016, where it got its eye-catching name. In Chinese, it is called “sha zhu pan” – literally “pig killing plate” – in reference to the process of fattening a pig for slaughter.
That’s because this scam – which rapidly spread across Southeast Asia during the COVID-19 pandemic and subsequently became a global problem – involves slowly gaining the victim’s trust. Once this has been done, the victim is tricked into making a bogus investment, often in a fake cryptocurrency scheme.
The key components of the pig butchering scam are:
- Long-term trust building. The scammers put a great deal of time and effort into building a relationship with the victim, sometimes over the course of months. They will adopt a complex and highly believable fake persona that is tailored to the victim’s interests or preferences.
- Multiple contact methods. To initiate and build a relationship with the victim, the scammer will use a range of contact methods, including email, social media, dating apps, text messages and more.
- Combines investment and romance scams. The scam usually involves luring the victim into making a bogus investment. However, the scammer often pretends to be romantically interested in the victim to increase their chances of success.
- Global scope. Pig butchering scams are often orchestrated by large-scale international crime syndicates. These gangs operate worldwide using social media and dating platforms. In many cases, the scammers themselves are being exploited and acting against their will.
- Focus on crypto. Cryptocurrencies are highly complex and lack the regulatory frameworks and legal protections of fiat currencies. Coupled with their potential for high returns, they’re the ideal choice for a pig butchering scam.
- High-pressure tactics. The scammer will often create a sense of urgency by presenting their proposed investment as time-sensitive – the victim will be led to believe it’s a “now or never” opportunity.
Pig butchering scams will feature most or all of these elements, though the specific form the scam takes can vary. Thankfully, as we’ll explain below, pig butchering scams usually follow a similar step-by-step process, which can make them easier to recognise.
How Does The Pig Butchering Scam Work?
A pig butchering scam can be very difficult to spot, given the level of effort the scammers put into building trust with the victim. However, it usually unfolds through an identical set of steps every time. By familiarising yourself with these steps, you’ll be far less likely to fall victim to it.
- Initial contact. The scammer will make contact with the victim using a fraudulent online identity. For instance, they might connect with the victim using a fake profile on a dating site or pretend to send a text message to the wrong number.
- Building trust. The scammer will gradually deepen the relationship, often by displaying a romantic interest in the victim. This can last for weeks or even months, with the scammer encouraging the victim to share details of their life to develop a sense of intimacy.
- Introducing investment opportunities. As the scammer builds trust, they will also start to mention their interest in investing, often specifically in cryptocurrencies. After a certain point, they’ll mention an exciting investment opportunity they’ve come across – one that is only available for a short time.
- Encouraging a deposit. The scammer will offer to help the victim take advantage of this unique and profitable investment opportunity. They will direct them to a fraudulent investment app or platform and show them how to make an initial deposit.
- Showcasing fake returns. The fake app or platform will seem to display real-time data showing the victim’s investment is performing well. This is then used to encourage the victim to invest more funds. The scammer might suggest that the profits can be used to set up their shared life together, encouraging the victim to invest more than they can afford and even take out loans.
- The vanishing act. Once the scammer is sure the victim has no further funds to deposit, they disappear without warning. The victim discovers they can no longer contact the scammer. At the same time, the investment website or app is taken offline and the victim has no way to access the money they’ve invested.
This scam leaves its victims emotionally and financially devastated. Not only have they been betrayed by a person they trusted, but they will also have lost significant amounts of money.
The victim may have gone into debt to fund their investments, and the scammer may have also used their personal information to commit other forms of identity theft. Understandably, it can seriously impact the victim’s mental health.
Given these life-changing consequences, it’s essential you can identify the pig butchering scam quickly and avoid being caught up. Below, we’ve listed the warning signs to look out for if you want to stay safe from the pig butchering scam.
How to Spot The Pig Butchering Scam: 6 Key Warning Signs
- You receive unsolicited messages from strangers. Scammers have sophisticated ways to make contact with potential victims, including using fake profiles on dating apps and social media. If you connect with someone online, take steps to verify their identity.
- An online contact claims to have insider knowledge. If someone you met online claims to have access to a unique investment opportunity, this should be a significant warning sign. Research their claims and seek professional advice before depositing any funds.
- You feel pressure to make a quick decision. Scammers will often try to prevent you from properly vetting their claims by adding time pressure. In a crypto-focused scam, they may claim that the price of the coin or token is about to increase significantly and there is only a brief opportunity to invest.
- There’s no easy way to withdraw money. When your initial investment seems to have paid off, you will naturally want to withdraw some of your profits. If you can’t do this easily – if the funds are locked for a set period or there are technical issues, for instance – you may be caught in a pig butchering scam.
- You’re encouraged to conceal things from friends and family. Scammers will often seek to isolate their victims from their loved ones and discourage them from discussing their plans. They may claim that the information they’re providing is confidential or suggest that other people will interfere with their romantic relationship.
- If it seems too good to be true, it probably is. The bottom line is that anyone offering you a way to get rich quickly with minimal effort is almost certainly scamming you. If you’re being offered a “once in a lifetime” chance to make large amounts of money, think twice.
Steps to Take If You’ve Been Scammed
If you’ve been targeted by a pig butchering scam, you must take immediate action to protect yourself. You should:
- Immediately cut off contact with the scammer.
- Change any passwords for your online accounts.
- Contact your bank immediately to block any payments.
- Report the fraud to Action Fraud.
- Collect any information you can related to the scam (e.g., any information about the scammer, details of payments made, etc.)
- Seek legal advice from a qualified solicitor
The last step is especially important if you’re hoping to recover the money you’ve lost. A solicitor with experience in crypto fraud recovery can help track down your lost assets and will maximise your chances of holding the scammers accountable.
At CEL Solicitors, we’re specialists in recovering stolen cryptocurrency. With in-depth knowledge of the relevant regulations, as well as the complexities of the crypto world, we’ve helped a wide range of victims to get their money back. Take a look at the case of Simon Hoadley below for one of our success stories.
To start your own fraud recovery journey, call us today on 0330 822 3755 or fill out our online form.
