The United States Commodity Futures Trading Commission has partnered with a banking association and multiple federal regulators to warn consumers about “pig butchering” crypto investment scams.
The American Bankers Association Foundation, a “private regulator,” and other federal regulators, including the Securities and Exchange Commission, are now working with the CFTC’s Office of Customer Outreach and Education (OCEO) to spread an infographic, the CFTC said on Sept. 11.
The one-page infographic shows how a pig butchering scam works — from how victims are targeted and groomed to how scammers receive funds — and advises what to do if someone falls victim.
The scheme sees scammers use social media to contact victims and instigate a fake romantic relationship to win their trust and lure them into a fraudulent crypto investment.
“It targets individuals who think they would never fall for this type of scam by giving them an introspective on how these fraudsters have perfected their criminal craft to entice even the savviest investors,” the CFTC explained.
The regulator said the best course of action is to “stop the scam before it starts” by simply not responding.
“Partnering with federal and state regulators as well as consumer protection groups and other organizations helps spread the CFTC’s customer education message and hopefully reaches people before they can get scammed,” said OCEO director Melanie Devoe.
A slew of federal agencies will also share the infographic including the SEC’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), the Department of Homeland Security, the Secret Service along with the FBI and IRS.
The latest infographic comes after the CFTC and the Justice Department’s computer crime team partnered in July to establish the first-ever conference to combat pig butchering.
The FBI said on Sept. 9 that Americans lost $5.6 billion from cryptocurrency fraud in 2023, up 45% from 2022 — noting that over $215 million was lost to “romance” scams.
Earlier this month, the Federal Trade Commission warned crypto ATMs have become increasingly used by scammers, with stolen funds increasing nearly 10-fold since 2020, a CNBC reported on Sept. 1.
It typically involves the scammer contacting the victim, claiming to be a customer service representative, and flagging an attempted identity theft or account breach.
The scammer will then direct the victim into depositing funds into a crypto ATM using a QR code that links to the scammer’s wallet.
Around $110 million was lost via this scam tactic last year, with those over 60 years old being three times more likely to fall victim than younger adults.
