In recent years, the cryptocurrency landscape has seen the emergence of a sophisticated type of fraud known as “pig butchering” scams. This term describes the process of “fattening” a victim before financially exploiting him. These scams are meticulously engineered to defraud individuals through well-orchestrated steps. Understanding the stages of a pig butchering scam can help identify and prevent them, as well as take measures to mitigate their consequences. Below we summarize common fact patterns reported by victims who sought our assistance.

Typical Stages of Pig Butchering Crypto Scams

1. Initial Acquaintance

The scam often begins on social media platforms, dating sites, or direct messaging apps. Scammers create a false sense of familiarity, sometimes claiming to have met the victim before or offering a friendly conversation.

2. Building Trust

Over time, the scammer cultivates a relationship, often under the guise of friendship or romantic interest. The scammer engages in regular communication, gradually gaining the victim’s trust.

3. Introduction to Investment

The scammer introduces the idea of cryptocurrency trading, presenting it as a lucrative opportunity. The scammer often claims to have insider knowledge or a successful analysis team.

4. Increasing Investments

As the victim’s confidence grows, he is encouraged to invest more. Scammers manipulate the trading platform to show fake profits and inflated account balances. Sometimes, scammers allow the victim to withdraw some portion of initial assets to show that he can always take profits, only to induce the victim to invest more.

5. Withdrawal Challenges and Additional Demands

When the victim attempts to make a substantial withdrawal, he encounters obstacles. Scammers concoct various excuses, such as the need to pay taxes, withdrawal fees, or other kinds of costs related to the investment. They never agree to offset the fee from the invested amount, regardless of how high the displayed profit is.

6. Persistent Communication and Pressure

Scammers maintain communication, often pressuring the victim to invest more to release his funds or to avoid alleged legal issues.

Steps to Mitigate the Consequences of a Scam

Here we must state a disheartening truth: recovering funds lost in pig butchering scams is lengthy, expensive, and arduous. Scammers often employ complex financial transactions to obfuscate the money trail. This includes instructing victims to engage in international transfers and moving funds through multiple crypto exchanges and wallets. This is designed to make it harder to trace and recover stolen funds and to hide the scammers’ identities. Complicating things further is that scammers commonly use fake identities to pass KYC checks on exchanges, which makes tracking their identities a nearly impossible feat. But some scammers are far less sophisticated, leaving a plethora of tracks that can be used to reveal their identities.

Given these particularities, here is the approach we’ve developed at our firm for pig butchering scam cases:

1. Legal Assessment: Victims provide the details of their case, enabling us to understand the specifics of the scam.
2. Investigation: We collaborate with blockchain and open-source intelligence analysts to attempt to uncover the scammer’s personal information, even from minimal data like social media accounts or phone numbers.
3. Outreach: We contact law enforcement agencies and the legal departments of crypto exchanges to trace and freeze funds.
4. Legal Proceedings: If the amount at stake is significant and the prospects for recovery exist, we file lawsuits, request temporary restraining orders, and engage in discovery to freeze and recover assets. Where the scammers are located outside the United States, we have experience in coordinating with local counsel and service providers to pursue scammers in other jurisdictions.

Pig butchering scams represent a significant threat in the digital age, combining emotional manipulation with financial fraud. Awareness and understanding of these scams are vital for prevention. For those affected, swift legal action is essential.

If you have been a victim of a pig butchering scam, you can visit our Crypto Fraud Investigations to submit your details for our review.