Known as “Sha Zhu Pan,” a Chinese phrase that loosely translates to “pig butchering,” the scam involves cryptocurrency, or digital currency that’s exchanged through a computer network and not through a financial institution like a bank. In the case of the scams, the “pig” is the victim who is being primed for “butchering” – meaning they’ll be bled dry of their money.
“The victims in Pig Butchering schemes are referred to as ‘pigs’ by the scammers because the scammers will use elaborate storylines to ‘fatten up’ victims into believing they are in a romantic or otherwise close personal relationship,” according to an affidavit from a 2023 pig butchering arrest.“Once the victim places enough trust in the scammer, the scammer brings the victim into a cryptocurrency investment scheme.”
Here’s how the scam works, according to the FBI:
Using a script, the scammer contacts and individual, typically through a dating or social media app or via phone calls and text messages that are meant to appear to have been misdialed. After a period of time building trust and rapport, sometimes through the exchange of racy pictures, the scammer convinces the victim to invest in cryptocurrency with the promise of high-yield returns.
Some scammers even point the victims to websites that appear authentic but are actually controlled by the thieves.
After the victim has made several cryptocurrency investments through the fake sites, they discover any request to make a withdrawal or cash out their investment is denied. Sometimes, the scammers request additional investments, taxes or fees to obtain the money. Once the victim’s funds are exhausted, the scammer then vanishes cutting off contact with the victim and taking the money with them.
The scam is becoming more common and profitable, according to the FBI.
In 2022, investment fraud caused the highest losses of any scam reported by the public to the FBI’s Internet Crimes Complaint Center - $3.31 billion. Frauds involving cryptocurrency, including pig butchering, represented most of these scams, increasing 183% from 2021 to $2.57 billion in reported losses last year. According to the FBI, the highest number of reports came from victims between the ages of 30 and 49.
The Michigan Attorney General’s Office had some advice to avoid the pig butchering scam:
Look for red flags:
- Strangers sending seemingly innocuous text messages out of the blue.
- Strangers who quickly try to move the conversation to WhatsApp or another social media site.
- People who avoid video-calling with multiple excuses or flatly refuse to initiate any kind of video-calling.
- People chit-chatting about their insider investment knowledge.
- The URL of the investment platform doesn’t match the official website of a popular cryptocurrency market or exchange but may be very similar.
- The investment app generates warnings of being “untrusted” when launched, or the computer’s antivirus software marks it as potentially dangerous.
- The investment opportunity sounds too good to be true.
Follow these tips to protect yourself:
- Don’t send money, trade, or invest with a person you have only met online.
- Don’t speak of your financial position or investments.
- Don’t share personal information or current financial status with strangers.
- Don’t provide your banking information, social security number, copies of your identification or passport, or any other sensitive information to anyone online or to a site that you cannot verify is authentic.
- If an online investment or trading site promotes unbelievable profits, it is most likely just that—unbelievable.
- Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.
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