‘Pig-Butchering’ Is the Latest Crypto Scam, FinCEN Warns

The Financial Crimes Enforcement Network is asking asked banks to report suspicious activity that could be related to “pig butchering,” in which victims who have been fooled into thinking they're in a romantic relationship or close friendship are lured into investing in fraudulent crypto funds.

The scheme has been likened to fattening a pig before slaughter, hence its name.

In a statement issued Friday by the unit of the U.S. Treasury known as FinCEN, Acting Director Himamauli Das said that the scam "has impacted far too many Americans, which is why FinCEN is sounding the alarm and asking financial institutions to report suspicious activity indicative of this scheme.”  

FinCEN financial transactions to root out crimes like money laundering or terrorism. In these cases, he scammers convince their victims to invest in fake crypto platforms, and in some cases their funds are stolen on the spot. In others, scammers lead their victims into thinking their funds are increasing, and dupe them into paying additional fees.

Pig-butchering has increasingly become a focus of enforcement agencies since the FBI issued a warning about the scheme in 2022. Scammers find their victims, or “pigs,” through text messages, dating apps and social media and then work to “fatten them up” — essentially tricking them into thinking they’re in a close personal relationship.

According to FinCen, such schemes are perpetrated by criminal enterprises in Southeast Asia that use forced laborers to reach out to millions of potential victims. "Suspicious Activity Reports filed by financial institutions will enable law enforcement to both aid victims and track down the perpetrators," Das said.  

Other enforcement agencies also have taken action to crack down on crypto scams. In 2022, the U.S. Attorney’s Office for the Eastern District of Virginia department seized seven websites, or domain names, that were used to steal $10 million from victims. The Department of Justice seized $112 million linked to pig butchering scams in April.

FinCEN has asked financial institutions to report customers who initiate large transfers to virtual asset service providers, which include ATMs and crypto exchanges, if they have no background in crypto trading. Banks were asked to report customers who seem anxious to get funds “to meet demands or the timeline of a virtual currency investment opportunity,” FinCEN said in its alert, which outlines further outlines pig butchering and its warning signs.