US federal agencies, including the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and others, have joined forces to tackle a rising type of cryptocurrency scam known as “pig butchering.” This type of scam involves fraudsters creating fake romantic relationships through social media to build trust with victims. They then persuade these victims to invest in fraudulent crypto schemes.
The CFTC has released an infographic to educate the public on how these scams operate, from initial contact to the fraudulent handling of funds. This effort aims to prevent victims from falling prey to such scams by informing them about the tactics used by scammers and advising on how to respond if targeted.
In 2023, cryptocurrency fraud led to significant financial losses, with $5.6 billion reported stolen, and romance scams alone accounted for over $215 million. The CFTC’s initiative is part of a broader effort that includes collaboration with various federal and state regulators, consumer protection groups, and organizations like the Financial Industry Regulatory Authority (FINRA) and the Department of Homeland Security.
The infographic warns that scammers use methods like crypto ATMs to further their schemes, where they might trick victims into depositing funds into a scammer’s wallet. The FTC has also highlighted an increase in the misuse of crypto ATMs for scams.
For traders and investors, staying informed and vigilant is crucial. Recognizing the signs of such scams and understanding how they operate can help avoid becoming a victim of these fraudulent schemes.
