The Delaware Department of Justice’s Investor Protection Unit issued a cease and desist order to 23 accounts, entities, and individuals involved in a crypto scam known as ‘Pig Butchering.’ The order freezes crypto assets acquired through these unlawful means as the department further investigates the perpetrators.
The move comes after several Delaware residents filed claims to the Attorney General’s office after being scammed. Because of the transparency of blockchain transactions, a data analytics company traced crypto assets belonging to the Delaware complainants to several wallets on centralized exchanges.
What is a Pig Butchering Scam?
To clarify, there are no animals involved in this scam. In this instance, the pig refers to the target of the scammers. The butchering relates to how a pig is fattened up before being slaughtered for its meat. This scam originates in southeast Asia and has been a problem in the crypto world since 2021.
In essence, ‘Pig Butchering’ is a twist on the more commonly known romance scams where a criminal courts their target and slowly asks for money once trust is gained. In this version, the scammer poses to be a very well-off investor. They will befriend their target and show off a very luxurious lifestyle. Often they’ll send screenshots of their crypto accounts with the fantastic results of their trades and investments.
Eventually, the scammer offers the target the only chance to participate in these same investments. Then the target invests money onto a brokerage website created by the scammer to look natural. Initially, the target can withdraw their money and earnings without issue. This lulls the target into a false sense of security. This is followed up with the scammer finding creative ways to get the target to invest more.
As the target continues to invest money into the account, unexpected losses or barriers to withdrawing their money will occur. These include taxes, fees, or delays such as only being able to remove at some future date. Once the target refuses to add more to the accounts or starts demanding their investment be returned, the scam ends. The fake brokerage website disappears, and with it, their money.
How to Identify a Pig Butchering Scam
The critical components of the scam to look out for are:
- Someone you don’t know frequently contacts you online with an attractive profile picture and a seemingly luxurious life.
- This person will often post about making money in cryptocurrency.
- They will ask about your financial goals and encourage you to think bigger.
- They invite you to “check out” their trading website for more information.
- You will be offered a risk-free investment that sounds too good to be true.
Remember, many nefarious actors on the internet are looking to deceive unsuspecting people. Maintaining a healthy distrust of people you don’t know regarding your finances is essential. Never share your finances online with someone you don’t know. And if someone messages you promising significant returns on your investment, it’s best to block them.
