What pig butchering scams are and how to avoid them

Pig butchering scams, which are a relatively new form of fraud in crypto, involve bad actors using the false illusion of romance or friendship to financially defraud their victims. This scam is typically built over a long period, and involves earning trust with the victim to encourage them to deposit their funds in a seemingly legitimate opportunity — before the fraudster disappears.

As cryptocurrency continues to enter the mainstream, pig butchering scams are on the rise. In this article, we'll explain what pig butchering scams are and how you can avoid them.

Need to know

  • Pig butchering is a relatively new scam in crypto that aims to defraud victims by first building strong relationships with them.

  • The scam doesn't typically involve sending money directly to another person, but investing in or trading on a financial platform instead.

  • The scam uses confidence and human emotions to succeed — meaning you could be a victim and not yet realize it.

  • The use of crypto and blockchain technology, which are decentralized and largely anonymous, makes it very difficult to recover funds.

  • Healthy skepticism of financial opportunities and a reluctance to engage in unsolicited messages can protect you from pig butchering scams.

What is the pig butchering scam?

Pig butchering scams combine conventional investment fraud with elements of romance scams, where victims are lured in by their relationship with the perpetrator. The scam takes its name from the act of fattening a pig for slaughter, as victims are encouraged to continually invest more funds into a fraudulent platform or vehicle before the scammer disappears with the funds.

Usually, the relationship between victim and scammer starts on social media or dating and messaging apps through an unsolicited message. From here, the scammer builds the relationship and trust gradually, before fabricating an opportunity or situation that requires the victim's help or investment. Most often, this help is in the form of depositing cryptocurrency into a seemingly legitimate platform, or trading assets with the promise of healthy returns. And, because of the strength of the relationship, victims have no idea they're being led into a scam.

Notably, the scam usually requires the victim to invest in a platform or entity and not share assets directly with the scammer to build legitimacy. For many, handing funds over to a relative stranger will cause suspicion. Depositing funds with an organization, meanwhile, can feel more trustworthy.

In some cases, the victim will be given a small profit on their deposit to encourage further investment — until the scammer disappears. Because the scam involves the use of crypto and blockchain technology, which are decentralized and relatively anonymous, it's extremely difficult for the victim to recover their funds.

Why do people fall for the pig butchering scam?

Pig butchering works primarily because of emotional manipulation. Trust is built over time by sometimes charismatic scammers who prey on the good nature of others to steal funds. By building a strong relationship — whether a friendship or romantically — the scammer is better able to persuade the victim to take the desired action.

This scam is also effective because it often capitalizes on the victim's relative lack of knowledge surrounding cryptocurrencies. When trust is formed, many victims will willingly be guided by the scammer towards setting up and making a crypto deposit they'll likely never see again.

Finally, the old fashioned lure of handsome financial returns is another reason why this scam is effective. If the victim trusts the scammer and their apparent strong knowledge of crypto, they can more easily be persuaded to invest or trade with the promise of financial freedom.

Breaking down the pig butchering scam

Let's break down the pig butchering scam with a hypothetical walkthrough, to help you better understand and avoid falling victim yourself.

  • Mary receives a message from someone she doesn't know, called 'Sam'. Sam claims to be contacting Peter, but quickly realizes he has the wrong number. From this seemingly innocent mistake, Sam starts to build a genuine relationship with Mary.

  • As the trust is built, Sam mentions that he invests in crypto — with good returns. He encourages Mary to do the same, pointing her towards an unfamiliar but seemingly legitimate platform to do so.

  • Early on, Sam requests that Mary invests small amounts, and may show supposed profit to convince Mary that returns are already being gained.

  • Gradually, Sam requests larger and larger investments on the platform, with the promise of further returns.

  • Eventually, Mary states she'd like to withdraw some of her money, and is told by Sam that fees or taxes will need to be paid.

  • As Mary begins to show resistance to further investment and tries to withdraw her money, 'Sam' disappears. Meanwhile, the supposedly legitimate trading platform can suddenly no longer be accessed, leaving Mary with no way of getting back her funds.

How to protect yourself from the pig butchering scam

There are numerous ways you can protect yourself and your assets from the pig butchering scam.

  • Be skeptical of unsolicited messages from strangers received through social media channels, dating apps, or messaging apps.

  • Always do your own research before trading or investing, and never rely solely on the advice of a stranger.

  • Keep a healthy skepticism around any financial opportunities presented to you.

  • Don't allow yourself to be pressured or rushed into an action that requires you to share digital assets, money, or personal details.

  • Always check the legitimacy of financial platforms — even if they appear to be a well-recognized brand.

  • Block suspicious individuals and report them to the relevant authorities and the platform they've contacted you through.

5 warning signs of the pig butchering scam

  1. The relationship moves quickly: You receive an unsolicited message from someone you don't know who wants to develop a relationship with you unusually fast.

  2. Unsolicited investment advice: The conversation quickly turns towards crypto or finances, with the suggestion that you can make a lot of money.

  3. Unknown or unusual platforms: You're directed towards an unknown or unusual trading platform, which may appear to be low-quality.

  4. High-pressure tactics: The scammer will apply pressure to commit funds and claim that an opportunity will soon be missed if you don't act now, preying on FOMO to manipulate you.

  5. Supposed returns: If your newly found friend claims your investment has made gains but you can't access them, you might have fallen victim to pig butchering.

The final word

The pig butchering scam is becoming more common in crypto as scammers seek new ways to manipulate innocent people into parting with their money or digital assets. The scam relies on the innocence and lack of crypto knowledge among victims, which is why being knowledgable and skeptical are valuable in protecting yourself.

The warning signs of a pig butchering scam, outlined above, should be relatively easy to identify, helping you avoid the fraud and take action to also protect others. If you are interested in trading cryptocurrency, it's always advisable to use a legitimate platform — verified by and accessed yourself — to avoid scams.

Disclaimer
This article may cover content on products that are not available in your region. It is provided for general informational purposes only, no responsibility or liability is accepted for any errors of fact or omission expressed herein. It represents the personal views of the author(s) and it does not represent the views of OKX TR. It is not intended to provide advice of any kind, including but not limited to: (i) investment advice or an investment recommendation; (ii) an offer or solicitation to buy, sell, or hold digital assets, or (iii) financial, accounting, legal, or tax advice. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk, can fluctuate greatly, and can even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances.
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