Americans are being defrauded by \u201cpig butchering\u201d cryptocurrency investment scams, with criminals utilizing social media to cheat thousands of people into losing hundreds of millions of dollars, according to U.S. authorities.<\/p>\n
\u201cPig butchering\u201d involves scammers tricking a victim, referred to as a \u201cpig,\u201d into investing money in cryptocurrencies by promising a high rate of return. According to an FBI press release<\/a>\u00a0on April 5, the scam pulls on \u201cheartstrings and purse strings.\u201d The fraud is named for the way in which scammers feed potential victims with promises of romance and riches.<\/p>\n Once scammers build a trusting relationship with victims, they float the possibility of investing in cryptocurrencies. After the victims invest as much funds as possible, the scammers cut them off and run away with their money. Criminals involved in the pig butchering scam mine social media and dating apps for victims.<\/p>\n The scam began in China in 2019, and is now becoming more prevalent in the United States. Last year, the FBI\u2019s Internet Crime Complaint Center received more than 4,300 complaints related to these scams which totaled $429 million in losses.<\/p>\n In a statement<\/a>, Jason Kane, deputy assistant director of the U.S. Secret Service Office of Investigations, called the pig butchering scheme as the \u201cnext generation of the long con,\u201d according to The Washington Post.<\/p>\n \u201cFraudsters may identify their victims and coerce them into investments, producing so-called returns on the investments to solicit further investments. The public must be vigilant in their online activity, aware of who they are interacting with and suspicious of any solicitation of funds from an unknown source,\u201d he said.<\/p>\n In November, the U.S. Attorney\u2019s Office for the Eastern District of Virginia announced the seizure of seven domain names that were used in the pig butchering scam.<\/p>\n A court document<\/a> related to the case reveals the fraud faced by Victim 1 who lost millions of dollars after they were lured into investing money at cryptocurrency investment platform simexlua.com by Suspect 1. In May, Victim 1 had made an investment of around $400, which over the next four months ballooned to $9.6 million.<\/p>\n The mobile app used to send messages to Victim 1, notifying earning profits that were \u201cfictitious\u201d in nature. When trying to withdraw the money, Victim 1 would be contacted by customer service representatives who ask them to make additional payments as \u201cfees\u201d and \u201ctaxes.\u201d Initially, Victim 1 transferred certain funds to make \u201cincome tax payments.\u201d<\/p>\n \u201cThis tactic of Suspect 1 and customer service requesting \u2018taxes\u2019 and \u2018fees\u2019 continued until August when Victim 1 determined it was a scam and stopped making investments,\u201d according to the document.<\/p>\nDefrauding Victims<\/h2>\n
Identifying Fraud<\/h2>\n
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