The Commodity Futures Trading Commission (CFTC) has teamed up with various federal and private organizations to tackle the rise of crypto scams known as “pig butchering,” as reported on Sept. 11. These scams have resulted in substantial financial losses due to the lack of awareness and understanding among consumers. The regulator’s new campaign aims to educate the public on how to recognize the warning signs and avoid falling victim to these fraudulent schemes.
By partnering with groups such as the American Bankers Association Foundation, the SEC, and FINRA, the CFTC’s Office of Customer Outreach and Education (OCEO) will be delivering educational material to raise awareness about pig butchering scams. This includes an infographic that outlines the different stages of the scam, from how victims are targeted to how the fraud progresses. It also provides tips on identifying warning signs and offers advice for individuals who may have been targeted.
In addition to the infographic, the OCEO and its partners have released an investor alert that sheds light on how scammers build trust with their victims through unsolicited messages. The alert advises consumers to steer clear of suspicious communications and to report any questionable messages to the authorities.
The CFTC’s efforts extend beyond educational material, as they are working in collaboration with federal agencies like the FBI, the IRS’s Criminal Investigation unit, and the Department of Homeland Security. By joining forces, these organizations seek to equip the public with the necessary tools and knowledge to prevent falling victim to fraud.
The latest findings from the Chainalysis 2024 Crypto Crime Report highlight the alarming rise of pig butchering scams, which have become the most profitable type of crypto scam this year, resulting in billions in losses for victims. These scams involve fraudsters building trust with victims through online relationships, often initiated via text or dating apps, before convincing them to invest in fake crypto projects and disappearing with their funds.
The report also reveals that 43% of scam inflows in 2024 were directed to wallets that were newly active that same year, indicating a surge in new scams. Scammers are becoming more efficient, with the average lifespan of scams decreasing significantly from 271 days in 2020 to just 42 days in 2024. They are also utilizing shorter, more targeted campaigns, making it challenging for law enforcement to track and disrupt their operations.
Illicit marketplaces play a role in fueling these scams by selling seasoned social media profiles, which scammers purchase to appear legitimate. These marketplaces have facilitated over $10 million in crypto flows over the past two years.
In conclusion, the CFTC’s collaborative efforts with various organizations aim to raise awareness about pig butchering scams and provide the public with the necessary knowledge and tools to protect themselves from falling victim to these fraudulent schemes.
