The surge in crypto scams known as “pig butchering” has prompted the Commodity Futures Trading Commission (CFTC) to take action in collaboration with federal and private organizations. These scams have resulted in billions in losses due to a lack of awareness and understanding among consumers. The CFTC’s Office of Customer Outreach and Education (OCEO) has partnered with groups like the American Bankers Association Foundation, the SEC, and FINRA to raise awareness about these scams through educational materials.
One of the key initiatives of this campaign is an infographic that explains the stages of the scam, from how victims are targeted to how the fraud progresses. It also highlights warning signs and offers advice for those who may have been affected. Additionally, the OCEO and its partners have released an investor alert that describes how scammers gain trust and manipulate victims through unsolicited messages. The alert encourages consumers to avoid engaging in suspicious communications and to report such messages to authorities.
In addition to these efforts, the CFTC is collaborating with federal agencies such as the FBI, the Internal Revenue Service’s Criminal Investigation unit, and the Department of Homeland Security to provide the public with tools and knowledge to prevent fraud. The goal is to arm consumers with the information they need to recognize the warning signs of these scams and avoid falling victim to them.
The latest Chainalysis 2024 Crypto Crime Report revealed that “pig butchering” scams have become the most profitable type of crypto scam this year, with victims losing billions. These scams involve fraudsters building trust with victims through online relationships, often via text or dating apps, and convincing them to invest in fake crypto projects before disappearing with their funds.
The report also highlighted the rapid evolution of these scams, with scammers employing shorter, more targeted campaigns to make it harder for law enforcement to track and disrupt them. Illicit marketplaces are fueling these scams by selling seasoned social media profiles, which scammers use to appear legitimate. These markets have seen over $10 million in crypto flows over the past two years.
Overall, the CFTC’s campaign aims to arm consumers with the information they need to recognize and avoid falling victim to “pig butchering” scams. By raising awareness and providing educational materials, the agency hopes to prevent fraud before it occurs and protect consumers from significant financial losses.