Authorities unite to combat cryptocurrency ‘pig slaughter’ scam

The U.S. Commodity Futures Trading Commission (CFTC) announced on September 11 a new partnership with federal and private organizations to combat the growing wave of cryptocurrency scams known as “pig butchering.”

These fraud schemes have already resulted in billions of dollars in losses. In this sense, the initiative aims to raise public awareness and prevent more consumers from falling victim to these scams.

The CFTC has said that these scams have been successful due to consumers’ lack of knowledge and understanding of the tactics employed by criminals. The regulator’s campaign aims to prevent fraud by providing investors with the information they need to identify warning signs and avoid falling for these scams.

Pig slaughter scam

As part of the partnership, the CFTC’s Office of Consumer Education and Outreach (OCEO) will collaborate with entities such as the American Bankers Association Foundation, the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to disseminate educational materials about these schemes.

Among the resources released is an infographic that details the stages of the scam, from victim selection to the execution of the fraud. It also highlights warning signs and offers guidance for those who may have been affected.

The campaign also includes an investor alert, in which CFTC partners explain how fraudsters gain victims’ trust through unsolicited messages and manipulate them into investing in fake cryptocurrency projects. The authorities encourage consumers to avoid suspicious interactions and report any suspicious communications.

Other federal agencies are also involved in the campaign. These include the FBI, the Internal Revenue Service’s (IRS) criminal investigation unit, and the Department of Homeland Security (DHS). Together, these institutions aim to provide the public with tools and information to prevent cryptocurrency-related fraud.

profitable fraud

Chainalysis’ 2024 Cryptocurrency Crime Report highlighted that “pig slaughter” scams have become the most lucrative type of fraud in the industry this year, with victims losing billions of dollars. In this type of scam, criminals build relationships with victims online, often through messaging or dating apps. The scammers then convince victims to invest in fake cryptocurrency projects, only to disappear with the funds.

The report also found that 43% of scam revenues in 2024 went to wallets that became active this year. This indicates an increase in new scams. Furthermore, the average duration of these schemes has dropped significantly, from 271 days in 2020 to just 42 days in 2024. According to the authorities, these figures reflect the evolution and efficiency of these operations.

Fraudsters have also been using underground marketplaces to buy up established social media profiles. This strategy is designed to give the scams an appearance of legitimacy. These marketplaces have moved more than $10 million worth of cryptocurrency over the past two years, according to recent data.