Victims of 'Pig Butchering' Crypto Investment Scams suffered 'Massive Losses.'

An emerging and rather a complex type of investment scam known as "pig butchering," in which flirtatious strangers convince unsuspecting users to invest in crypto trading systems, which then seize funds when victims try to cash out, has reportedly robbed victims of millions of dollars in crypto assets.

The term "pig butchering" refers to a sophisticated and labor-intensive process of luring people into investing in suspicious scams by creating fake profiles on social media platforms and dating sites.

"The fraud is named after the way scammers feed their victims with promises of romance and riches before cutting them off and taking all their money," the FBI warned in April 2022.

According to a recent report by security news and investigation website Krebson Security, the most common type of pig butchering scam involves promising crypto platforms that offer unprecedented returns in a short period of time.

According to the report, these scams frequently begin with what appears to be an erroneous SMS and are also common on dating sites and apps. As soon as the victim responds, they request that the conversation continues via the WhatsApp messaging platform.

"The people forced to perpetrate these scams have a guide and a script," Erin West, deputy district attorney for Santa Clara County in Northern California, was quoted as saying.

West stated that there are "horrifying stories" of victims who have fallen victim to this scam, ranging from young women in their early careers to senior citizens and even people working in the financial services industry.

Courtney Nolan, a divorced mother of three daughters, was mentioned in the report as one of the victims who lost more than USD 5 million in such a scam. Everything began, according to Nolan, with a direct Twitter message from a "crypto enthusiast" who promised to mentor her on how to make consistent profits using the major crypto trading platform XTB.com.

The scammer directed Nolan to open an account on xtb-market[.]com, a clone of the original website designed to appear confusingly similar to XTB's official platform. The website promoted various investment packages, including a "starter plan" that required a USD 5,250 up-front payment in exchange for a return of more than 15%.

According to the report, she began with small investments and quickly realized large profits. Nolan claimed she was able to withdraw amounts ranging from $10,000 to 30,000 USD on multiple occasions.

However, after investing over USD 4.5 million, her account was frozen. Before she could reactivate her account or access her funds, Nolan received a tax statement stating that she owed nearly USD 500,000 in taxes. Her mentor and the entire website vanished after she paid the "tax bill."

A pig butchering scam typically consists of four components. According to Krebson Security, these include social media or dating apps, WhatsApp, no video (scammers will make up any excuse not to do a video call), and investment chit-chat.

As previously reported, romance scams have increased dramatically in recent years. A South Korean woman drugged a man she met on a smartphone chat app in May 2021 and stole USD 87,000 in cryptocurrency from his phone.