The multibillion-dollar scam known as “pig-butchering,” once treated as a consumer-fraud issue, has crossed a new threshold and is prompting national security concerns.
In a podcast, National Security Intelligence chief of chainalysis, Andrew Fierman, and former prosecutor Erin West, founder of the cross-sector anti-scam nonprofit Operation Shamrock, discussed How pig slaughter becomes a threat to national security.
“So if anyone touches money in any way, you’re part of it. So you have to be prepared to understand the threat and the gravity of what’s happening on a national security level,” said West, emphasizing the importance of education and awareness in the fight against crypto scams.
A pig-butchering scam is a long-term fraud strategy in which criminals attempt to establish trust in a victim, often through romance or friendship, before it’s a fake cryptocurrency investment platform and draining their funds.
The growing scale of pig butchering scams
In the podcast, the duo discussed how scams ringed across Southeast Asia operating dormitory-style compounds where unaffiliated workers hook up with victims, Foster Trust through romance and then push them into fake crypto investments with the goal of draining funds.
In 2023, the US Department of Justice (DOJ) seized About $112 million in crypto linked to pig-butchering scams. In a February report, chainalysis said Pig butchering scams increased by nearly 40% year-on-year in 2024, while overall crypto scam revenue exceeded $9.9 billion.
In addition, an under-reported area of pig-butchering is that victims are often hit twice. The duo said on the podcast that after the initial scam, victims sometimes received follow-up contact from fake recovery companies claiming to help recover money.
“When this happens to you, you’re put on a list (…) and more likely to be hit up again,” West said.
Fierman and West say these scams have matured into a transnational crime model, mixing human trafficking, money laundering and crypto mining, making it more complex than your everyday fraud.
Fierman suggested that Blockchain transparency offers an opportunity for regulators, exchanges and virtual service providers (VASPs) to intercept scams.
“One of the advantages of blockchain, at least as a mechanism for it, is that there is a potential opportunity for disruption if it’s right,” he said. “And the transparency of the blockchain provides that opportunity to potentially disrupt the cash out point.”
How do the authorities come in?
With scams having a wider impact, governments will step in. On November 12, the DOJ announced The formation of a “scam center strike force” to target Chinese-linked transnational organizations behind crypto investment fraud in Southeast Asia.
At the same time, law enforcement departments in the region are implementing freezes and sanctions to combat the issue. On August 27, Asia Pacific (APAC) law enforcement teamed up with chainalysis, okx, tether and binance to Freeze $ 47 million in the pig slaughter fund.
The strategy is not simple, but it is clear. This is to disrupt on-ramp and off-ramp points for scammers, punish facilitators and build private partnerships with the public.
“My advocacy about transnational organized crime has always been: use every tool in our arsenal. Sanctions, indictments, diplomatic pressure,” West said.
Related: Scammers pose as Australian police to steal crypto, authorities warn
Red flags to watch out for
As with many scams, there are ways to spot a Pig-butchering scam. Scams often involve the manipulation of feelings, which means that someone expressing strong feelings for you very quickly through online channels, especially without meeting, could be a scam.
It becomes even more suspicious if anyone you contact refuses to share personal information or professional credentials.
One of the main signs that it’s a pig butchering scam is when the person starts asking for money, even if they claim it’s for an emergency.
It also takes the form of risk-free investments and easy money, often showing fake screenshots of huge profits to convince their victims to invest.
https://www.youtube.com/watch?v=T06MVWZ6ngm
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