The United States Commodity Futures Trading Commission has collaborated with a banking association and several federal regulators to alert consumers about “pig butchering” cryptocurrency investment scams.
The American Bankers Association Foundation, a private regulator, along with other federal regulators including the Securities and Exchange Commission, are now working with the CFTC’s Office of Customer Outreach and Education (OCEO) to distribute an infographic, as stated by the CFTC on Sept. 11.
The infographic, consisting of one page, explains how a pig butchering scam operates – from targeting and grooming victims to how scammers obtain funds – and provides guidance on what to do if someone becomes a victim.
The infographic showing how criminals start a pig butchering scam: Source: CFTC
The scam involves scammers using social media to contact victims, initiating a fake romantic relationship to gain their trust, and enticing them into a fraudulent cryptocurrency investment.
“It targets individuals who believe they are immune to falling for such a scam by demonstrating how these fraudsters have perfected their criminal tactics to deceive even the most knowledgeable investors,” explained the CFTC.
The regulator advised that the best course of action is to “prevent the scam from starting” by simply not responding.
ABA Foundation’s infographic shows how victims can protect themselves from pig butchering. Source: CFTC
“By collaborating with federal and state regulators, as well as consumer protection groups and other organizations, we can share the CFTC’s customer education message and hopefully reach individuals before they fall victim to a scam,” said OCEO director Melanie Devoe.
Various federal agencies will also share the infographic, including the SEC’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), the Department of Homeland Security, the Secret Service, as well as the FBI and IRS.
This latest infographic follows the CFTC’s partnership with the Justice Department’s computer crime team in July to establish the first-ever conference to combat pig butchering.
The FBI reported on Sept. 9 that Americans lost $5.6 billion to cryptocurrency fraud in 2023, a 45% increase from 2022, with over $215 million lost to romance scams.
Related: Scammers ditch ‘elaborate’ crypto Ponzis for pig butchering: Chainalysis
Earlier this month, the Federal Trade Commission warned that crypto ATMs are increasingly being utilized by scammers, with stolen funds rising nearly 10 times since 2020, as reported by CNBC on Sept. 1.
The typical scenario involves the scammer contacting the victim, posing as a customer service representative, and claiming there was an attempted identity theft or account breach.
The scammer then instructs the victim to deposit funds into a crypto ATM using a QR code linking to the scammer’s wallet.
Approximately $110 million was lost through this scam tactic last year, with individuals over 60 years old being three times more likely to fall victim compared to younger adults.
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