Pig Butchering in cryptocurrency: how not to fall victim to the scam

Classic scam methods are losing their effectiveness because they are one-dimensional, and even users with limited technical knowledge can easily recognize them. As a result, criminals are forced to change their approach.

A new scam scheme called Pig Butchering is gaining popularity in the crypto sphere (as "slaughtering pigs"). Pig Butchering is not just a new scam but a sophisticated scheme aimed at a specific victim.

What is Pig Butchering?

Pig Butchering is a fraudulent scheme in which the criminals first build a trusting relationship with the victim and then steal their assets. The scheme is named Pig Butchering because the scam method closely resembles the process of raising pigs for slaughter.

The danger of Pig Butchering lies in the fact that the scheme uses not general social engineering tactics but targeted attacks aimed at specific victims. The criminals in the Pig Butchering scheme tailor their approach to the victim to gain their trust and "hook them in." The closer the victim perceives the conversation partner, the higher the likelihood that they will be willing to transfer money to the scammer.

The Pig Butchering scheme is not new: it became widespread in China before 2016, when social networks were beginning to gain popularity among users.

However, in 2024, Pig Butchering became widely used in the crypto industry. According to statistics from the University of Texas, in the last four years, damages from Pig Butchering have exceeded $75 billion. In 2024 alone, more than 200,000 cases of fraud involving the Pig Butchering scheme were recorded, resulting in a total loss of $5.5 billion.

How does the Pig Butchering scheme work?

The implementation of the Pig Butchering scheme can be divided into three main stages: the setup, the warm-up, and the finalization.

Setup

At this stage, the victim meets the scammer. Often, in the implementation of the Pig Butchering scheme, the scammers try to establish a romantic relationship with the victim.

The acquaintance may start with a pseudo-random message in a messenger. However, the Pig Butchering scheme is also commonly found on dating social media platforms, where users are explicitly looking for romantic interaction. In this case, the scammer initiates the conversation with the future victim, trying to gain their trust.

At this stage, the scammers typically do not hint at any financial matters, though they might casually bring up the victim's profession and income level to "test the waters."

Warm-up

Once the scammer has convinced themselves that they have built a trusting relationship with the victim and lowered their guard, the next stage of the Pig Butchering scheme begins — the warm-up. At this stage, financial topics start to weave into the conversation, with mentions becoming more frequent over time.

It begins with subtle mentions that the scammer has tools or strategies that bring them stable financial profits in cryptocurrency. For instance, in the Pig Butchering scheme, a close acquaintance or relative who is an experienced analyst or trader often appears, providing the scammer's interlocutor with cryptocurrency trading signals for a small fee from the profits.

To convince the victim and execute the Pig Butchering scheme, the scammer presents fake evidence of earnings, such as platform statistics or withdrawal receipts. However, one should not trust these claims as any evidence can easily be fabricated, especially with the development of AI technologies.

Finalization

The culmination of the Pig Butchering scheme is the victim's agreement to deposit funds on a platform or transfer cryptocurrency. To push this forward, the scammer repeatedly demonstrates large profits. To further increase the victim's interest, the scammer initially suggests depositing a small amount and even allows the victim to withdraw funds with a profit.

The main goal of Pig Butchering is to make the victim feel actual profits and encourage them to deposit a larger amount in cryptocurrency into a fake platform or account. After the scammer successfully steals the victim's cryptocurrency, they disappear, deleting their accounts on social media and other platforms.

How to recognize Pig Butchering?

Be cautious if an unfamiliar person offers to transfer funds to an external wallet or platform that promises high returns. Otherwise, there's a risk of falling victim to the Pig Butchering scheme. Experienced investors practice not establishing financial relationships with people they do not personally know well.

One way to protect yourself from Pig Butchering is by thoroughly checking the platforms suggested for investment:

Research the platform's information on the internet and specialized resources

Check forums and blogs discussing cryptocurrency and investment platforms, such as Reddit, BitcoinTalk, and Trustpilot.

Use websites that track platform security and their history, such as:

• Whois.domaintools.com — for checking domain and server ownership information.
• ICANN Lookup — a tool for verifying website registration information.

Google search the platform's name with terms like "fraud," "reviews," or "feedback". This can help uncover multiple negative reviews.

Survey other experienced users and investors

Platforms like Reddit or cryptocurrency chats in Telegram are often sources of information from real people who might have encountered fraudulent schemes.

Professional investors share their experiences in specialized groups or forums. For instance, you can ask questions on BitcoinTalk, CryptoCompare, or cryptocurrency-related Telegram channels.

Check licenses and projects

Licensing is an essential indicator of a platform's legitimacy. For example, check company registrations with the U.S. Securities and Exchange Commission (SEC) or with other regulatory bodies in the relevant country.

Look for independent financial licenses issued by recognized authorities. New fraudulent platforms often have fake licenses that can be spotted with careful inspection.

Use services like CoinMarketCap and CoinGecko, which allow you to check cryptocurrency projects and their ratings based on objective market data.

Use specialized tools to check platforms

• ScamAdvisor — a site that helps determine the safety of websites based on multiple parameters.
• CryptoscamDB — a database containing information about suspicious cryptocurrency projects.
• Token Sniffer and BscScan — tools for checking smart contracts for signs of fraud in cryptocurrency tokens.

By conducting your own research, you can quickly spot red flags and determine that the platform being offered is a fraudulent one, likely designed to steal your assets via the Pig Butchering scheme.

Another critical step in recognizing Pig Butchering is understanding that no one in the financial sphere will ever offer investments that yield stable, high profits for a small fee. Always remember that all investments involve risk of loss, and only scammers promise guaranteed profits.