"Pig butchering," an account-draining cryptocurrency scam, prompts FBI warning

BALTIMORE - The FBI is warning about a potentially devastating cryptocurrency scam called "pig butchering," which could wipe out someone's life savings.

"Pig butchering" refers to a victim being fattened up for slaughter, according to the FBI.

FBI data shows that 482 Maryland residents have fallen victim to cryptocurrency investment scams so far in 2024, with reported losses of more than $54 million.    

"Draining their entire checking and savings," said FBI Special Agent David Paniwozik. "They're draining their retirement accounts. Some of them are even taking personal loans as it relates to these." 

How does the scam work?

FBI Supervisory Special Agent Keith Custer says "pig butchering" scams can happen to anyone and the outcome can be brutal.

It starts with scammers building a trusting foundation with their victims.

"The scammers will spend weeks, even months, just building a foundation of trust with their victim," Custer said.

According to the FBI, cryptocurrency investment fraud is one of the most prevalent and damaging fraud schemes.

Finding victims for cryptocurrency scams

Criminals target victims through dating apps, social media or encrypted messaging apps and convince them that they can help them achieve financial success by investing in cryptocurrency. 

Victims will be directed to purchase cryptocurrency and then will transfer it unknowingly into the control of the scammers using a fraudulent trading platform.

"They'll be shown what they think is a significant investment gain over a period of time and then they'll be convinced to invest more funds," Custer said.

When victims attempt to withdraw their money, they're told to pay a fee or taxes, according to Custer.

"They'll never be able to cash out," Custer said.

"It's an irreversible transaction," said FBI Supervisory Special Agent Chris Lenhart. "It's very hard to trace it and to recover it back."

FBI agents specializing in cyber crimes say most of these scams are carried out by criminal organizations, typically based in Southeast Asia.

They say scammers will also set up phony cryptocurrency recovery sites to prey on victims desperate to get their money back

"So then they're providing more cryptocurrency to a company to try to recover cryptocurrency that they'll never be able to get back," Lenhart said.

If it sounds too good to be true...

FBI agents say it's crucial to be weary of unsolicited messages and anything that sounds too good to be true.

"Beware of someone you never met, who just popped onto your phone a couple weeks ago sharing investment advice," Custer said "Take a beat, take a second, stop. The scammer is always going to impart some sense of urgency, don't give in, talk to someone you know. If you have a financial advisor, talk to them."

If you believe you might be a victim of this scam, you can report it to the internet crime complaint center at ic3.gov.