Cryptocurrency Pig Butchering – According to the US Department of Justice, over $112 million in cryptocurrencies have been confiscated in connection with shady investment scams known as “pig slaughtering.” The Justice Department claimed that the confiscated Bitcoin accounts were reportedly “used to launder proceeds of multiple cryptocurrency confidence scams.”
According to the prosecution, six virtual currency accounts have seizure warrants authorized by judges in Arizona, California, and Idaho. The proceeds of numerous frauds that cost victims millions of dollars are allegedly housed in these accounts after they were coerced into investing their savings in dubious Digicash scams.
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Seized $112 Million Cryptocurrency
According to the California court records [PDF], “In this matter, the FBI Phoenix Division has identified at least 69 victims with an estimated loss of at least $33.9 million tied to these different fraudulent investment platforms.”
While pig-butchering fraud is a relatively new variation on the classic online romance scam, it typically begins with a simple text or WhatsApp message. Following the mark’s reply, the con artist makes an effort to get to know the target personally by frequently sending photos and the like before persuading them to invest in a Bitcoin “opportunity.”
The names and websites of the investment companies may sound and appear like those of real corporations, but they are undoubtedly fake. The money is transferred to a Bitcoin wallet under the control of the scammers after the victim contributes. When victims want to withdraw money, they occasionally have to pay “taxes,” which is just one more way that fraudsters try to take more money from the victims.
The court records claim that most victims eventually lose all access to their accounts and all of their money.
Cryptocurrency Pig Butchering Cases
A woman named “Jenny” approached the victim, a retiree known as “JZ” on Facebook, in one of the incidents described in the warrant. She referred JZ to a trading platform where her “buddy” was the CFO while professing to be an expert in gold spot trading.
Jenny gave JZ screenshots of her bogus trades showing significant profits while claiming to have $3 million in her account. The court documents claim that after persuading him to open an account with a minimum balance, “Jenny assured JZ he could have financial freedom if he deposited more monies.”
JZ deposited $1.1 million by March 2022, and his “trading winnings” increased his account to $2.4 million. Yet JZ lost everything as a result of several “extremely aggressive trades.” Jenny promised JZ that she would finance him $650,000 to make up for his losses if he could come up with $300,000.
JZ increased his balance to $2.8 million by adding the money and an additional $100,000 from his retirement account that he had previously refused to touch. But, that was before he requested a withdrawal.
The Aftermath
JZ’s account was at this point frozen, and he was informed that to unfreeze it, he would need to pay a “verification fee” of $466,000. So he made the necessary payment. A further $230,000 was then required for “final verification.”
After that, JZ attempted to withdraw $50,000 from his account but was informed that due to “blockchain congestion,” he could not. He was told he can only withdraw after he deposits an additional $99,000 to join the trading platform as a “VIP member.” He deposited the extra cash once more.
The swindle then quickly came to an end. JZ attempted to speak with the platform, but nobody answered. Jenny cut off JZ from her social media accounts and stopped communicating with him.
JZ lost all of his money—roughly $2.36 million.
In conclusion, Investment fraud caused the largest losses of any scam, totaling $3.31 billion. This is according to data recently released by the Federal Bureau of Investigation’s (FBI) Internet Crimes Complaint Center (IC3). The government reported that from $907 million in 2021 to $2.57 billion in 2022, bitcoin investment fraud increased by 183%.
