Pig butchering

Pig butchering is a type of fraud involving fake investments — often in cryptocurrency. It is characterized by:

  • Long-term communication between the scammer and the victim — in the order of several months;
  • Large sums; victims can lose hundreds of thousands, even millions, of dollars.

Pig butchering and social engineering

At the heart of pig butchering lies social engineering. The scammer finds a suitable victim on social networks, dating sites or messengers, and strikes up a conversation. Often, the initial point of contact is a message “accidentally” sent to the wrong recipient.

To begin with, the scammer tries to build a trusting (or romantic) relationship with the victim by sticking to neutral topics.

After some time, the conversation turns to money-making investments — often in “up-and-coming cryptocurrency projects”. Unlike other scams, the attacker does not ask the victim to transfer money to them personally. Instead, they offer to help create an account on some trading platform that will be fully controlled by the victim.

As soon as the latter signs up and makes a deposit, the scammer starts giving trading tips that always earn big profits. On a roll, the victim deposits more funds and makes ever bigger profits.

However, when the time comes to cash in, the funds cannot be withdrawn, since both the site and the profit are fake. In some cases, the scammers allow the victim to withdraw a certain amount at the start of the “investment” in order to build trust, but the rest of the accumulated funds get siphoned off.

Thus, there tend to be four stages to such a scam:

  1. Gaining trust. The scammer tries to lull the victim’s vigilance and gain their trust.
  2. Introducing the topic of investments. The scammer suggests a money-making scheme and “helps” the victim, all the while making the latter feel fully in control.
  3. Raising the stakes. By showing how profitable the scheme is, the scammer motivates the victim to invest increasingly large sums.
  4. Cutting contact. When the victim has invested a significant amount or tries to withdraw their funds, the scammer severs all contact and disappears with the money.

Pig butchering and fraud factories in Southeast Asia

Pig butchering scams tend to be the work of large cybercriminal groups rather than standalone actors. The rank-and-file operators who make direct contact with targets are often themselves victims of these groups, forced to work in so-called fraud factories (aka fraud parks, scam farms, scam centers, scam hubs or scam sweatshops).

Fraud factory owners are always on the lookout for workers skilled in languages and online communication. They lure such people with the promise of well-paid office jobs as IT/SMM specialists, translators, and the like. But when the recruits turn up for work, they are forced to do the criminals’ bidding (usually through confiscation of documents and threats of violence).

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