The Rise of Pig Butchering Scams – What You Need to Know Now

The growth of sophisticated scams poses a potent threat to the security of both individuals and financial institutions. One such emerging threat is the ‘Pig Butchering Scam.’

Let’s see what it is in simple terms – Think of your average, everyday scam. Now, amplify its complexity and add a dash of psychological manipulation to it.

As per a new study, pig butchering scammers have stolen more than $75 billion in cryptocurrency between 2020 and 2024.

Let’s quickly dive deep into what is a pig butchering scam and how it works.

What is a Pig Butchering Scam?

The pig butchering scam is a long-term fraud combining romance scams, investment scams, and cryptocurrency scams. The scam originated in Southeast Asia and comes from the Chinese phrase “Shāz Hū Pán,” meaning pig butchering.

Named for its methodical approach to ‘fattening’ victims before ‘slaughtering’ them financially, this scheme is characterized by its long-term strategy, where scammers invest considerable time and resources in building trust and rapport with their targets.

Unlike other quick-hit scams, Pig-Butchering focuses on a gradual process of manipulation, making it especially dangerous and difficult to detect early on.

In this, the scammer lures the individual to invest their money in profitable ventures. Once the victim invests a large amount of money, the scammer disappears leaving no way for the victim to recover the funds.

Let’s understand in detail how it works.

How does pig butchering scam work: A quick glimpse

The Pig-Butchering Scam follows a series of steps that are designed to exploit trust and manipulate the emotions of the victims’ for financial gain. Here’s a closer look at how it works:

  • Initial contact: Scammers reach out via unsolicited messages on social media or messaging apps, often customizing their approach based on the victim’s social media activity.
  • Building trust: The scammers gain the trust of the victim by presenting themselves as knowledgeable professionals or successful investors. They engage in non-financial conversations over time, share personal stories, and show interest in the victim’s life.
  • Investment discussion: The scammer then subtly shifts the conversation towards investments, claiming connections with reputable financial institutions to build credibility.
  • Wealth illusion: After discussing normally, the scammer starts sharing fake success stories and screenshots from fake brokerage accounts to showcase significant gains, enticing victims with the promise of similar success.
  • Account verification: Instead of directly asking for money, the scammers guide the victims to create and verify the account, giving them a sense of control. However, this platform is controlled by the scammers only.
  • Simulate success: Victims invest via these platforms, which mimic real ones but show fake profitable results, solidifying the scam’s credibility in the victim’s mind.
  • Scammers disappear: The scammers ask the victim to add more money. Then, when the victim tries to withdraw the funds, the account says they need to pay fees or taxes to access it. By the time the victim realizes this, the scammers disappear, erasing their digital footprints.

This scam is a perfect mix of emotional manipulation with the lure of financial gain, making detection and disengagement increasingly challenging for the victims.

Bottom Line

If you are a financial institution looking to safeguard your operations and prevent fincrimes like Pig Butchering scams, try Velocity – the ultimate FinCrime Solutions Suite. From fraud detection and crypto monitoring to AML transaction monitoring, Velocity can help you quickly detect and prevent fincrime activities and safeguard your financial institution.

Vineet Mishra
Vineet Mishra

Specializes in leading implementation of Financial Crime prevention software suites across the USA, Canada, and Australia’s financial institutions.

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Vineet Mishra

Specializes in leading implementation of Financial Crime prevention software suites across the USA, Canada, and Australia’s financial institutions.

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