What is a “pig butchering” scam? They are costing victims tens of billions each year, on top of the emotional damage they are causing.
These cunning investment cons rely on psychological manipulation to lure victims into online relationships, before convincing them to invest in fake cryptocurrency platforms which can wipe out their entire life savings…
It is estimated that $75 million has been stolen by pig butchering scammers from victims around the world. However, the true scale of losses is unknown as victims are often too embarrassed to report the crime to the police.
Platforms have a duty to safeguard users from these harmful scams. Let’s peel back the layers of deception to understand how pig butchering works, identify the warning signs, and take the first step in shielding your platform and protecting your users.
The term “pig butchering” is a chilling metaphor for the scam technique where victims, much like pigs, are “fattened up” with affection and attention, only to be financially “slaughtered” by being conned out of their wealth. The method originated in China in 2019, and Southeast Asia has since emerged as a hotspot, with criminal organisations in Cambodia, Laos and Myanmar often exploiting victims of human trafficking to execute these scams.
Pig butchering typically begins with the creation of fake accounts on dating apps or social media platforms, or ‘wrong number’ text messages to initiate contact with potential victims. Through the use of social engineering, the scammer develops a close personal bond over several weeks or months. Once trust is securely in place, they introduce the idea of lucrative cryptocurrency investment opportunities, enticing the victim with supposed insider knowledge or family ties in the finance sector, and the promise of substantial returns.
Victims are lured into investing through fake apps or websites that mimic genuine trading platforms, sometimes even receiving initial returns to reinforce the scam's credibility. Convinced that everything is legitimate, victims invest larger and larger sums of money - this is the phase known as “fattening the pig”.
Later, when victims try to withdraw their money, the platform will claim there’s an issue with the account, or that they need to pay huge fees and taxes to get their cash. By the time the victim realises the truth, it’s invariably too late; the scammer, the platform, and the invested funds have all disappeared.
The true impact of pig butchering scams remains unclear due to the low reporting rates - estimates suggest that a mere 15% of victims muster the courage to report these incidents to the police, due to severe embarrassment and emotional turmoil. Even family members remain in the dark as victims feel ashamed of what’s happened and become more isolated.
Author, Becky Holmes, recently published an insightful book on the subject - ‘Keanu Reeves is Not in Love With You’ - giving a candid account of her interactions with pig butchering scammers as she strung them along to uncover their actions and distract them from their scams. For Becky’s research, she spoke with many victims whose stories of isolation, shame and despair, never mind financial loss, are raw and real. Reading her book gives an insight into why victims, at their most vulnerable, will not report the crime they’ve been subjected to.
However, the importance of reporting cannot be overstated. TRM Labs' investigation revealed that these scams are not isolated incidents but elements of a vast, sophisticated global network, involving intricate money laundering schemes through the use of Tether across numerous cryptocurrency exchanges. This complex web complicates the tracing and recovery of stolen assets, as funds are cleverly dispersed and obscured through a series of transactions, indicating a high level of coordination within transnational criminal organisations, particularly in Southeast Asia. This underscores the challenges in dismantling these networks and the importance of increasing victim reports to better combat these global criminal activities.
A California prosecutor has shone a spotlight on the harrowing effects of pig butchering scams. Many of the victims involved in her cases lost upwards of $1 million and others their entire life savings, facing a bleak recovery, with one individual tragically committing suicide and another attempting to. One notable case involved Chinese businessman Wang Yicheng, whose account saw an influx of over $90 million, including a direct connection to $9.1 million in fraudulent funds. Among the victims was a 71-year-old Californian man who saw his $2.7 million life savings evaporate, deceived by a scammer masquerading as a young woman named Emma.
A 2022 survey of 550 pig butchering victims revealed a staggering average loss of $115,117, with over three-quarters losing more than half of their net worth and a third sinking into debt. In desperate attempts to salvage their finances, many victims find themselves juggling multiple jobs, considering bankruptcy, or facing predatory lenders.
The aftermath involved the following drastic measures:
These figures paint a grim picture of the financial and emotional wreckage left in the wake of pig butchering scams, illustrating a cycle of loss and desperation for those targeted.
One striking aspect of pig butchering scams is the victims’ demographic profile. Far from preying on those with meager savings, these frauds target financially stable individuals - high-earning professionals and those on the cusp of retirement, with transactions often falling between US$1000 and US$1m. As a result, victim losses pertaining to investment fraud are considerably higher than other types of fraud.
A significant portion of these victims are women (69%) aged between 25 and 40 years, most of whom are well-educated, holding bachelor's or master's degrees. Interestingly, 21% of the victims are married. These scammers skilfully exploit their victims' aspirations for financial success and their trust in technology, capitalising on their lack of experience with regulated brokerage operations.
It appears that the scammers’ strategy often focuses on "big fish" who possess considerable assets, particularly targeting individuals seeking to bolster their retirement funds with lucrative investments, demonstrating a calculated approach to selecting their victims based on financial capacity and life stage.
Having grasped how detrimental the impact of these scams can be, here are the 10 warning signs to identify if pig butchering scammers are targeting users on your platform:
Identifying the fake accounts on your platform is a crucial first step in thwarting pig butchering scammers masquerading under false identities. With fraudsters now using AI to craft more convincing lies, from fluent conversations to eerily realistic images, the battle against fake accounts is tougher than ever.
At Themis, our Social Media Monitoring modules continually monitors behavioural signals for suspicious patterns, and uncovers connected accounts and fraud rings, making it easier to kick scammers to the curb with confidence. Our solution doesn't just find the fakes; it helps you understand their sneaky tactics, ensuring your platform remains a safe space for true connections.
The unfortunate reality is that pig butchering scams are happening on a huge global scale. The complexities involved in combating this worldwide threat means online platforms and dating apps are in a constant battle to protect their users and maintain integrity.
But, there's a silver lining. Armed with the right knowledge and tools, like those provided by Themis, creating a scam-free zone where users can connect without fear is possible. By fostering awareness, staying vigilant, and deploying sophisticated fake account detection technology, we can take a stand against pig butchering scammers together.
Find out how we can help protect your business against fraud. We’d love to hear from you.
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