Romance Fraud: Inside Crypto’s Pig Butchering Scam

Romance scams are on the rise–and crypto users are increasingly the target. The FBI estimated that over $739 million was stolen in romance scams in 2022, and forecasted more crypto theft by this means in 2023. The irreversibility of blockchain transactions makes crypto an attractive target.

While many crypto thefts in the past involved relatively small amounts, one growing scam targets wealthier individuals and aims to steal larger amounts of crypto. It’s known as pig butchering. The name comes from the Chinese phrase for pig butchering, shā zhū pán (杀猪盘), as many actors involved in this scam appear to be China-based.

What is pig butchering?

Pig butchering employs social engineering to win victims’ trust. By building a relationship online, the attacker hopes to persuade you to share your crypto-account logins, so they can steal your coins.

Unlike many forms of crypto theft, the pig butchering scam thinks big. Instead of taking the modest initial amount of crypto you may unwittingly give them, this scam’s not done until you’ve handed over all your crypto.

How pig butchering works

In pig butchering, the attacker reaches out online to possible victims–the pigs–in order to build relationships and gain trust. The venue may be dating sites, social-media platforms, SMS texting, or WhatsApp.

The attacker seeks to strike up a friendship or romantic relationship, but they’re not your friend. The criminal’s goal is to gain your trust through social engineering, in order to get you to direct you to an app or site under their control.

From there, the attacker will try to string the friendship or romance along and create the illusion of initial success in whatever investment they recommended. Once you’ve handed over larger sums, the attacker disappears with your coins.

Finding a pig

A common opening gambit in pig butchering is to send an initial message that simply says ‘hi.’ Another frequent approach is to send ‘wrong number’ texts that refer to events and people you don’t know, as in: “It was great meeting up at the park yesterday, Jack! Let’s meet there again tomorrow at the same time.” The sender may have an attractive profile photo–but it’s fictitious.

If you reply to their message, a relationship begins. As the attacker sympathizes with your problems and shares false information about their made-up life, the mark comes to trust the attacker.

At some point, the conversation turns to trading cryptocurrency. The attacker indicates they’re making big money in crypto–and offers to help you do the same.

Fattening the pig

The attacker insists that their app or website offers guaranteed or very large profits. At first, you may see some success and be able to withdraw your ‘profits.’

In fact, this is done to build your confidence that your new friend is a crypto expert. The payout is provided by the attacker to entice you to invest more.

This is the ‘fattening’ phase. Instead of taking you for a small sum, the attacker encourages you to keep depositing larger amounts so that you can continue reaping the illusory profits. They may promise lavish gifts such as a romantic vacation you’ll take together, once you’ve invested your life savings and gotten rich on their crypto investing tips.

Butchering the pig

Once you’ve deposited larger sums and the attacker decides they’ve gotten all they can from you, the ‘butchering’ phase ensues. Suddenly, you lose access to your account on the attacker’s platform.

You’re told you owe substantial fees or taxes before you can regain access, often of a sum larger than the total you’ve deposited so far. Attempts to contact your friend or love interest are fruitless–they’ve disappeared, along with all your crypto.

Recent examples of pig butchering

Media outlets across the country have reported on many recent victims of pig butchering. Here are just a few of the highest-profile cases that have made the news:

• In March 2023, the U.S. Dept. of Justice seized $112 million in crypto linked to pig butchering. Over half the funds were from cases in Los Angeles, with other accounts traced to Idaho and Arizona. Six virtual currency accounts associated with the scams were seized. One of the victims was first contacted on LinkedIn by “Fei Kuang,” who’d learned she had a small crypto account. She was encouraged to invest ever-larger amounts on a platform Kuang recommended, but was told she owed 20 % in “taxes” when she tried to make withdrawals. Her losses totaled $2.5 million.
• TV station Denver7 reported that local resident Steve Belcher lost his life savings of $1.6 million in late 2021 after meeting “Shikuka Suzuki,” supposedly another Denver resident, on a dating app. They compared notes about making money in crypto, and soon Belcher was signed up on the platform Suzuki recommended, which appeared to profit from volatility in the price of Bitcoin. His account seemed to grow to $8 million, but when he tried to withdraw funds, he was told he owed $1.5 million.
• A San Francisco Bay Area man lost $1 million in Fall 2021 after making crypto investments at the behest of a scammer he knew only as Jessica. After being contacted via WhatsApp and promised huge profits, the mark was fed fake results about initial profits, enticing him to deposit ever-larger amounts.
• In May 2021, a 25-year-old Texas woman lost an $8 million inheritance to a man she met on Tinder. At first, Divya Gadasalli was able to make substantial monthly withdrawals from the crypto account she created through the man she knew as Jerry Bulusa. The withdrawals gave her confidence her investments were flourishing. Eventually, after she deposited millions, her access to the account was cut off amidst demands for substantial taxes and fees. She subsequently sued Bulusa, as well as financial institutions that handled the transactions.

Unlike many scams in which uneducated people are targeted, in pig butchering, the victims are often well-educated. They’re also either well-off themselves or have access to family money, and likely have mentioned cryptocurrency in social media.

How to stop pig butchering in progress

If you’ve recently struck up a new online friendship or romance and suspect you may be caught up in a scam, here’s what to do:

• Stop talking. Immediately break off all communication with the potential scammer.
• Block their account and report them. Whatever form of communication you’ve used to talk to the potential scammer, block their address so they can’t contact you again. Then, report them as a possible scammer wherever you were chatting, whether that’s a message app, dating site, or social-media platform.
• Change logins. If you’ve shared any account information, immediately change your passwords to new, strong ones.
  Don’t deposit more funds. If you suspect you’re being conned, resist all enticements to get you to deposit more money on their platform, especially to pay fees or taxes that you’re promised would “unlock” account access.
• Watch your accounts. Keep a close eye out for any possibly fraudulent transactions, and report any you notice to your financial institutions immediately.
• Report the scam to authorities. You can file a police report with your local law enforcement and ask them to contact any crypto exchanges that may have been used by the scammer. Local police may not take action, but local reports help federal authorities detect patterns and make high-level arrests.

Don’t waste time beating yourself up about being deceived. Instead, take all the steps you can to disentangle yourself from any investments you’ve made based on your new friend’s advice. Often, you can limit your losses if you act quickly.

Prevent romance fraud in 10 simple steps

Crypto users should always be on guard against scammers looking for ways to steal their coins. If any online romantic relationship veers into a discussion of finances, be on guard.

Fortunately, there are many basic steps users can take to avoid falling for pig butchering:

1. Never respond to strangers. Don’t reply to unsolicited messages from people you don’t know. They’re often the opening gambit in a scam.
2. Don’t invest with anyone you haven’t met IRL. Never share financial details or account information with people you only know online. Be particularly wary of suggestions that you invest in a specific financial product or on a specific platform. If your new friend or paramour won’t do a video chat or meet up in person, that’s a red flag.
3. Independently verify. If you’re given investing tips online, do your own research. Search for information about whether it’s a scam, and don’t proceed without independent verification that it’s a legitimate platform.
4. Beware promises of guaranteed or overlarge returns. There is no such thing as guaranteed profits on speculative crypto investments.
5. Don’t invest if you don’t understand. If you’re presented with an investment opportunity that seems confusing or arcane, it’s not for you. Never invest in anything you can’t understand.
6. Don’t brag on social media. If you’ve made a profit trading Bitcoin, think before you boast about it on social media, especially in a public channel anyone can read. Posting about your profits can attract criminals.
7. Beware of ‘exclusive’ platforms. Pig butchering relies on luring you to a malicious app or website. Stick with well-known trading platforms–and review URLs carefully, as some fake sites will have similar names to legit sites.
8. Don’t let others ‘help’ you trade. Often, the attacker will offer to do your first trade with you, ostensibly to show you how it works. This offer to assist is a common feature of pig butchering.
9. Keep your emotions out of it. Fraudsters will often try to play on your emotions, telling you to imagine how happy you’ll be when you’re rich and can help out your family, or pay off your debts. Or they’ll set it up as a test of your love for them, whether you trust their financial tips. Investing decisions should never be emotional, but made by dispassionately analyzing the facts around the opportunity.
10. Resist FOMO. Scammers often create a sense of urgency to try to get you to deposit your crypto on their fake sites. Resist the pressure to invest now to get the best deal. Be skeptical of any offers you’re told will expire if you don’t act immediately.

With these simple steps, you can avoid entanglement with pig butchering scammers who might be looking to hook you with their fake investment opportunity and take your life savings.

Be a smart crypto user–not a fattened pig

Despite the growth of the pig butchering scam in recent years, crypto users who take precautions can easily avoid getting ensnared in it and losing coins. For more tips on how to stay safe in web3, see our Smart User’s Guide.