Pig butchering is a method of investment fraud, where bad actors use fictitious personas and technology to gain their victims' trust to target their finances. The scam gets its name from the practice of farmers fattening hogs for slaughter.
How does it work?
Some victims come across AI-generated videos of influential speakers, such as government officials or celebrities, backing investment websites where everyone can earn up to $5,000 a week, while others may stumble across these fraudulent domains on their own.
It can be hard to distinguish these platforms from genuine ones, as they have many of the same features. Nonetheless, there are red flags to look for, including customer tiers, big referral bonuses or promises of guaranteed rates of return.
Once on the page, victims are prompted to open a cryptocurrency trading account and begin investing. At first, the victim invests a small amount of crypto and appears to be trading successfully with support from their online coach, the fraudster. With the help of phony dashboards or apps, victims see exponential returns. As their confidence and account grows, they often invest larger sums of money.
However, when the victim goes to withdraw the funds, they are met with a number of manufactured reasons they cannot. Perhaps it's a temporary liquidity issue or tax bill to be paid, requiring more funds before money can be withdrawn. As the account remains tied up, the victim will realize they are likely getting scammed. The fraudster abruptly ceases contact, also known as ghosting, and the platform goes offline.
At this point, the victim may be contacted by a fraudulent recovery service. This could be a person masquerading as an ex-FBI or Canada Revenue Agency employee offering to recover assets, for a fee of course. In the victim's desperation to recuperate their investment, they may hand over even more funds.
It's important to note that cryptocurrency exists outside of the normal banking system, where there are established consumer protections. If you grant access to your accounts, you risk losing your funds without recourse for compensation.
Here's what you can do:
- Beware of unsolicited messages from strangers.
- Communicate with family and friends about investment decisions.
- Use a cold wallet to store cryptocurrency to avoid hack exposure.
- Work directly with a trusted over-the-counter or OTC desk such as TruStart.
And remember, if it sounds too good to be true, it probably is.
If you've fallen victim to a scam, stop all communication and contact your local police department and anti-fraud centre.
