Pig butchering scams have emerged as a significant cybercrime threat, costing victims billions of dollars worldwide. The transnational criminal organizations that run these frauds seek to exploit the victims' psychology through a prolonged campaign of getting to know the victim. The victim will often feel an emotional connection to the illicit actors, which can be challenging to break.
The Anatomy of Pig Butchering
The term "pig butchering" alludes to the practice of fattening up a pig before slaughter. In pig butchering scams, fraudsters cultivate relationships with victims over time, building trust before convincing them to invest in fake cryptocurrency schemes. The scammers use elaborate fake personas, often posing as successful investors or romantic interests, to lure victims into making increasingly significant investments.
This sophisticated form of fraud combines elements of romance scams and investment fraud, often exploiting cryptocurrency to defraud the victims. Pig butchering scams have already reached a fever pitch in the United States, as evidenced by the recent FBI report on cryptocurrency-related crime. Despite the glaring evidence, many law enforcement agencies, when asked, will say they have not seen cryptocurrency-related crimes occur in their jurisdictions. I say look harder! Law enforcement agencies must train their staff immediately, adopt preventative strategies, and leverage advanced technologies to combat this heinous crime.
The FBI's Internet Crime Complaint Center reported that losses to cryptocurrency investment scams reached $5.6 billion in 2023, nearly doubling from 2022. This surge is attributed mainly to the rise in pig butchering and investment scams, which have outpaced even business email compromise schemes regarding reported losses. Every state has reported massive losses.
Many local law enforcement agencies have found themselves ill-equipped and untrained to handle these complex, tech-savvy crimes. Some departments have turned away desperate victims, claiming they "don't do crypto." However, recognizing the need for better preparedness, some jurisdictions are taking proactive steps in training and collaboration.
Law enforcement agencies should advise pig butchering scam victims to:
There's a growing emphasis on collaboration between local, federal, and industry partners to leverage diverse skill sets and resources. However, federal agencies cannot and will not absorb all the cases that state and local agencies pass on to them.
Companies like Merkle Science have emerged as valuable partners as law enforcement agencies seek to enhance their capabilities in fighting cryptocurrency-related crimes.
Merkle Science provides specialized investigative tools and services that significantly boost law enforcement's ability to identify, investigate, and prosecute crypto crimes.
Merkle Science's Tracker is a precise and user-friendly investigative tool equipped with features that enable law enforcement to detect, investigate, and prosecute crypto-related crimes with unparalleled precision through:
Merkle Science's platform combines public datasets with proprietary algorithms and intelligence solutions to provide law enforcement with timely analysis and intelligence.
The fight against pig butchering requires a coordinated effort from law enforcement at all levels, working with financial institutions, virtual currency asset providers, and specialized blockchain analytics companies like Merkle Science. With these combined efforts, law enforcement can more effectively combat the rising tide of cryptocurrency-related crimes and protect vulnerable individuals from falling victim to sophisticated scams.
