Friday, July 29, 2022

PIG BUTCHERING – Fattening You Up to Steal Your Money with Cryptocurrency

The use of cryptocurrency by scammers has grown over five times according to the Federal Trade Commission (FTC) with losses to consumers from $130 million in 2020 to $680 million in 2021. And for the first quarter of 2022, losses amounted to $329 million. The median loss to crypto fraud is $2,600, compared to $1,000 across all fraud types.

Pig butchering refers to fattening up the pig for the kill and is used by romance scammers to refer to their process of developing scripts that promise romance and riches through social media to lure potential victims for their romance scams. The FBI in Oregon recently alerted the public to Chinese romance scammers who started operations in China and migrated to U.S. victims. The scammers use dating apps and other social media to find their victims.

The scammers will groom their target and eventually try to move communications off the dating app or website to WhatsApp or email.

After some time, typical romance scammers come up with a seemingly compelling reason that they need money. A new trend is for scammers to suggest that “investing” in a cryptocurrency would make the target rich. The scammer might say that they have been investing and they, naturally, would be happy to help the target.

The scammer will suggest setting up a cryptocurrency account and may provide a web link to an official looking cryptocurrency website to learn more about cryptocurrency investing. The website looks legitimate but, of course, is controlled by the scammer. Any money invested through the site will eventually go to the pocket of the scammer.

Scammers who use other techniques, such as employment scams, extortion scams, imposter scams, are demanding payment in cryptocurrency. In the past, the favorite mode of payment has been with gift cards. Like with gift cards, once the scammer has the funds, they are gone. And there is no way to get your money back. Cryptocurrency is not regulated so you do not have a bank to go to, to reverse the transaction.   

Scammers are always looking for new ways to take your money. Cryptocurrency offers a unique opportunity for scammers. It is new, mysterious, complicated, unregulated, and has received publicity recently. Many people have tried to “invest” in cryptocurrency as a legitimate investment rather than just use it to pay for a good or a service. Enticing a target into investing in something that is exotic and that the target does not understand gives the scammer all of the advantage.

 

The following links give more detail on cryptocurrency scams and cryptocurrency:

 

Krebs on Security:

https://krebsonsecurity.com/2022/07/massive-losses-define-epidemic-of-pig-butchering/

 

FBI:

https://www.fbi.gov/contact-us/field-offices/portland/news/press-releases/fbi-oregon-tech-tuesday-building-a-digital-defense-against-a-new-cryptocurrency-scam-pig-butchering

 

AARP:

https://www.aarp.org/money/scams-fraud/info-2022/cryptocurrency-schemes-ftc.html

 

Federal Trade Commission:

https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams#scams

 

Better Business Bureau:

https://www.bbb.org/all/scamstudies/cryptocurrency_scams/cryptocurrency_scams_study

 

 

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