New Delhi: While on-chain security was getting exploited by protocol hacks in the last couple of months, a new scam called “pig butchering” has risen to popularity, looting people of their life savings.
It is a new type of romance scam with fraudsters leveraging the hype around crypto investing. By promising high returns in a short period, these fraudsters are convincing people to invest large sums of money. Some of the latest victims lost anywhere from a few thousand to more than a million dollars.
How Pig Butchering Scams Unfold?
Such scams start with fraudsters approaching people on social media platforms like LinkedIn or Tinder. They create fake profiles with attractive female photos. Or they simply impersonate an old acquaintance to quickly establish trust.
At first, it doesn’t seem like someone is aiming to sell shady schemes because fraudsters maintain contact with victims for several weeks and months. They don’t emphasize the investment aspect until and unless they find vulnerabilities that are easy to exploit. For example, a Bay Area investor lost $1.2 million trying to make money to cover funeral costs for his father.
For outsiders, it can be hard to digest why someone would decide to put their life savings on the line. So the way it works is that scammers make victims believe that they are generating huge amounts of profit. They even create look-alike crypto applications of popular exchanges for investors to check their portfolios.
Furthermore, scammers sometimes allow withdrawals to strengthen the trust factor. As a result, victims end up making bigger investments that they can’t afford to lose. If they do incur losses, scammers try to squeeze more money promising they can make it back.
That’s why the scam is termed “pig butchering”. Similar to how farmers feed pigs to put on more fat before slaughtering, scammers feed artificial profits to victims to bet more money before cutting all contact.
What are the Red Flags?
Pig butchering scams are essentially based on various social engineering tactics. The involvement of cryptocurrency and fake investment platforms comes into play at a later stage.
So the first red flag is receiving texts or emails from an unknown person on dating sites. They will immediately try to start a conversation by sharing common interests and giving timely compliments. As they do proper background research on the person they’re targeting, it is hard not to give a reply.
They also suggest communicating via text to gain access to personal phone numbers. One way to identify if he or she is a scammer is by asking to get on a call. If one refuses to get on a call or side-tracks the conversation, they are likely scammers.
On the crypto front, scammers create crypto-trading sites that look similar to popular exchanges like Coinbase. But the difference lies in how one makes deposits. Scammers usually send screenshots to explain how to transfer funds and invest in different cryptocurrencies. This is the biggest red flag because victims end up sending money to a wallet that belongs to scammers and not the exchange.
