You may have seen the ads: “Earn a fortune by stuffing envelopes from the comfort of your own home!” or “Make $25,000 a day working online!”
Chances are, you’re also familiar with the accompanying feeling of dread, as you realize you’re being scammed. Unfortunately, these schemes are nothing new, and they’re only getting more sophisticated.
In this blog post, we’ll take a closer look at pig butchering crypto scams—what they are, how to spot these types of scams and what to do if you fall victim. We’ll also share some tips for protecting yourself from these scams in the future.
What are “Pig Butchering” crypto Scams?
The term comes from the way that scammers target new crypto investors. The idea is to get them to throw all their money into a questionable investment opportunity with the promise of huge returns. Then, once they’ve taken the bait, they ‘butcher’ the pig and take their money, leaving the investor with nothing. It’s a clever way of taking advantage of people who are new to the crypto world and don’t know any better.
The most common type of scam in this category is the “pump and dump” scheme. In a pump and dump scam, the scammers artificially inflate the price of a cryptocurrency by buying up a large amount of it, then dump it on unsuspecting investors.
The second most common type of scam in this category is the “pyramid scheme.” In a pyramid scheme, participants are promised huge profits if they invest in the scheme and then recruit new investors. As more and more people join, the pyramid gets taller and taller, until it inevitably collapses, taking all of the participants’ money with it.
In the beginning of January 2023, a cross-border investigation that was initiated in June 2022 resulted in the shut down of various call centers run by an illegal syndicate which was perpetrating this kind of fraud.
According to Europol, the suspects employed ads on social media to sway victims to websites secretly run by them, which presented exceptional investment options in cryptocurrency.
Initially, the victims who are mostly from Germany would invest small sums and were then tricked into transferring higher amounts due to the criminals’ faked price hikes that promised lucrative profits. The estimated financial damage for German victims is over two million euro, while other countries such as Switzerland, Australia and Canada also have victims. It is thought that there might be more unreported cases, meaning that the illegal gains made by these criminal groups – with at least four call centers in Eastern Europe – could reach hundreds of millions of euro.
Luckily, these call centers have now been taken down across Bulgaria, Serbia and Cyprus.
Who is at risk of Pig Butchering crypto scams?
The short answer is: anyone. Anyone can be at risk of falling victim to a pig butchering crypto scam. However, individuals who are new to the world of cryptocurrency and may not have a strong understanding of how it works may be more susceptible to these types of scams. Additionally, those who are looking to make quick profits and are not diligent in researching the legitimacy of an investment opportunity may also be at risk.
When it comes to pig butchering crypto scams, criminals have a few key techniques that they use to try and swindle you out of your money. The first is by pressuring you to make an immediate decision when it comes to investing in crypto. They will try to rush you into an agreement with promises about fast profits, and often won’t provide any real evidence supporting those profits.
Also don’t forget about the ever-present threat of hacking and malware attacks – pig butchering crypto scammers are experts at using malicious code to steal your funds without you ever realizing it was them.
Have you or any of your friends/colleagues encountered the pig butchering crypto scam menace? Scam Help would like to hear from you. By spreading the word, you are contributing to protecting unsuspecting populations whom the scammers could be targeting.