Unveiling “Pig Butchering” Scam- A Billion Dollar Industry

Criminals find advanced and inventive ways to deceive unsuspecting victims. Similar to a well-known technique of “Phishing” in which scammers use malicious links through email, text message, or social media platforms by posing as a trustworthy source with enticing requests, luring victims to reveal personal or confidential information, which the scammer then uses illicitly. A tactic is similar to a fisherman using bait to catch a fish, hence known as phishing!

One scam that has recently gained notoriety is the “Pig Butchering” cryptocurrency scam, which mainly originated from Southeast Asian countries like Myanmar, Cambodia, Laos, and Thailand, often directed and run by the involvement of Chinese triads, business people, and local authorities.

What is a Pig Butchering Scam?

The pig butchering cryptocurrency scam is a cyber fraud where perpetrators cultivate trust in victims and persuade them to invest in fraudulent cryptocurrency schemes. Unlike phishing, this scam is executed over the period after gaining the confidence of the victims over several weeks of telephonic conversation. The term “pig butchering” comes from the intricate layers of financial deception involved in these scams, which are reminiscent of the process of fattening an animal over the period before slaughter. Hence, metaphorically, the scam is called “Pig Butchering.”

Modus Operandi:

Pig butchering scams involve scammers, ironically, who themselves are victims of human trafficking, who are enticed by lucrative job offers to Southeast Asian countries and then transported to remote locations in heavily guarded compounds. These compounds become hubs for fraudulent activities, endangering victims from various East Asian and African countries.

There these trafficked victims are trained to operate as “pig butchering” scammers by establishing trust with potential victims through fake social media accounts. They often pose as attractive and successful individuals, engaging in cordial discussions or “love-bombing.”

After building rapport, the scammer introduces financial discussions, promoting cryptocurrency or currency trading success stories. Eventually, the victim is coerced into converting funds and transferring them to “an online account” which is under the scammer’s control. The account initially seems to be like any other digital investment account under the victim’s name. The scammers then persuade the victim to invest more and more in the account.

The scammer may create the illusion of profits and allow initial withdrawals of small amounts to gain the victim’s trust. However, when the victim attempts further withdrawals, the platform imposes fees or taxes, and apparently, the entire account vanishes.

Origin of the Scam:

Originating in China, pig butchering scams have now become prevalent in Southeast Asia. Organized criminal organizations have taken over these scams, often involving trafficked labor and complex financial layering schemes. These organizations have adapted their techniques and exploited the growing popularity of cryptocurrencies to carry out their fraudulent activities.

Key Players:

Some of the key players involved prominent figures like Wang Yicheng, a Chinese businessman and known mobster, and mobsters like Wan Kuok-Koi aka “Broken Tooth”, a former 14K triad boss. Many politicians and law enforcement authorities face allegations of involvement in the scam, to the extent of safeguarding the compounds from where these crimes occur.

Law Enforcement:

US authorities have prioritized cryptocurrency investment scams in their fight against a wave of fraud. The Secret Service seized around half a million US dollars from an account associated with Wang Yicheng, a Chinese businessman linked to the notorious pig butchering scam.

Yicheng became the subject of an investigation into a cryptocurrency investment fraud scheme. The investigation exposed how Yicheng, then-vice president of the Thai-Asia Economic Exchange Trade Association, a Bangkok-based group of Chinese traders, had ingratiated himself with some of the most powerful figures in Thailand’s law enforcement and political elite.

Why is This More Dangerous Than Other Scams? Not your average Joe:

These scams are not typical cyber scams but also international human trafficking and human abuse scams run by organized crime syndicates. These scams are estimated to be over a billion-dollar industry, surpassing the revenue generated by drugs for criminal organizations in Southeast Asia. This makes it a very lucrative market and the operations can potentially spread to other parts of the world.

Money Laundering:

This aspect is another major cause of worry as the money robbed from the victims travels through multiple criminal channels before getting into the hands of the crime bosses to avoid detection of direct involvement of the businessman, politicians, and other white-collar criminals, which puts this hefty amount of money at the disposal of criminals and terrorist organizations for several heinous activities. The use of this money is not limited to funding criminal gangs but can be used for terrorist activities all around the world, including prime targets like our homeland.

US and Western Targets:

Mostly these scams target Westerners for their vulnerability by using their lifestyle, ease of access to public records, and social media culture, which is used for social engineering for such crimes. Also, a stable economy and economic standard of living and high usage of technology and internet-connected devices give these criminals a massive pool of victims.

How to Avoid Pig Butchering-Related Scams:

Please be aware of any unknown or unreputed apps or links and do not click or download such apps. Verify the legitimacy of any app before you download it. There have been fraudulent pig money apps that have appeared in both the Google and Apple app stores.

Before searching or doing any business with a cryptocurrency website or any app it’s always good practice to verify the official website URL by carefully typing it in yourself instead of clicking on a link appearing in the web search. Double-check that it matches the spelling recommended by a reputable source. Fake URLs can closely resemble those of a major financial institution. For example, “capitalfinancialgroup.com”, a legitimate website, can be faked by fraudsters as “www.capitalfinancial-group.com."

Don’t trust investment opportunities with companies that you didn’t thoroughly research, and don’t believe anyone promising “risk-free investments” or doubling your cryptocurrency in a short period.

Keep an eye on reputable websites and news sources like Reddit or the Better Business Bureau’s scam tracker to stay up to date on what’s happening with cryptocurrency, and remember — if it’s too good to be true, it probably is! Do not join any unknown or unsolicited groups on any social media, no matter how tempting it may be. Be very careful when using any dating websites or apps, as not only Pig Butchering scammers but several other criminals use dating as a platform for targeting potential victims.

Report any suspicious activities to the concerned law enforcement department.