The newest FBI seizure resulted in over $6 million in crypto paid by American citizens after a scam operating out of Southeast Asia.
According to the FBI announcement on September 26, fraudsters created the impression among victims that they were investing in actual projects, which, over time, seriously hurt the people involved in the transactions.
FBI’s Yarbrough: Crypto Scams ‘Devastating’ to US, Millions Lost
Assistant Director Chad Yarbrough of the FBI’s Criminal Investigative Division told reporters that such crypto fraud schemes have disastrous impacts on Americans, underlining how important continued efforts are to stop these schemes that affect United States citizens. He also added that this FBI seizure is one of the largest in this year.
This incident epitomizes the growing challenges in fighting fraud related to cryptocurrencies in an ever-increasingly globalized market.
Yarbourgh commented in a press release:
“These types of schemes are devastating, and they’re impacting thousands of Americans every day. The FBI has seen victims lose millions of dollars, take second and third mortgages on their homes, all in the hopes of finding the next big investment opportunity.”
Newest FBI Seizure Exposes ‘Pig Butchering’ Scam
According to the FBI, the victims of this kind of scam were tricked into taking cash out from their bank accounts and putting it into crypto wallets, then onto fraudulent offshore platforms. In an effort to gain targets’ trust, con artists granted limited withdrawals early in the process.
A little later, however, victims were cut off from their accounts altogether and lost their entire investments. The practice is more commonly known as “pig butchering,” and it involves baiting and switching a victim.
FBI seizure of this kind isn’t something new. It said that this kind of scam is now a threat in the rising cryptocurrency space, when an asset seizure depends on a gradual, sustained build-up of trust.
‘Pig Butchering’ Crypto Fraud Targets 12% of US Daters
Otherwise known as Sha Zhu Pan, “Pig Butchering” is a long-term investment fraud wherein the victim is slowly and persistently coaxed into making investments of higher and higher values using cryptocurrency. This could be a blend of trust over time, usually on social or dating apps, before “slaughtering” them, meaning, stealing from them once there has been an investment worth mentioning.
This type of scam emerged in China around 2016 and then continued to spread throughout Southeast Asia, especially during the COVID-19 pandemic. It is not uncommon that the perpetrators themselves are victims previously trafficked by organized crime groups and forced to perform the fraud.
The fraud schemes have become even more widespread, with one October 2023 report indicating that 12% of Americans using dating apps said they had been victimized, which compares with 5% in 2018.
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