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The Federal Bureau of Investigation (FBI) Miami Field Office in coordination with the Internet Crime Complaint Center (IC3) has warned that there is a sudden increase of illicit investment schemes involving cryptocurrency, called “Pig Butchering”.
As crypto-assets continue to gain the attention of investors all around the world, they have also become a target for scammers who are looking to make some easy profits by exploiting users. In August, Web3 security analyst Serpent revealed the most nefarious crypto related scams on micro-blogging platform, Twitter.
Serpent explained several ways in which cyber scammers target and exploit rookie crypto users through the use of copycat websites, URLs, accounts, hacked verified accounts, fake projects, fake airdrops, and countless malware.
What is “Pig Butchering”?
The US federal organization issued a public warning on October 3 cautioning investors of “pig butchering scams” where criminals pose as highly successful traders in cryptocurrency to siphone money from victims. The modus operandi behind this crypto scam is to entice victims to make purported investments in cryptocurrency providing fictitious returns to encourage additional investments.
As per the warning letter, fraudsters will make contact with their potential victims via social media platforms posing as “long-lost friends or possible romantic partners” to drain money from victims. Individual are then guided through the investment process to make continuous deposits into the scammer’s website/app.
After the payment is made, victims are unable to retrieve the purported investments and often lose contact with the fraudsters, either due to the closing of the fraudulent website or the fraudster ceases contact with the victim.
Beware of Crypto ATMs
The public service announcement also noted that cyber criminals have been increasingly pushing their victims to transfer funds via crypto ATM machines. The FBI warned that crypto ATMs are emerging as a popular method that scammers use to receive funds from defrauded victims. The regulatory agency wrote,
“The use of cryptocurrency and cryptocurrency ATMs is also an emerging method of payment. Individual losses related to these schemes ranged from tens of thousands to millions of dollars.”
The #FBI warns that cyber criminals are increasingly exploiting vulnerabilities in decentralized finance (DeFi) platforms to steal investors cryptocurrency. If you think you are the victim of this, contact your local FBI field office or IC3. Learn more: https://t.co/fboL1N17JN pic.twitter.com/VKdbpbmEU1
— FBI (@FBI) August 29, 2022
In the wake of surging crypto related crimes, the US Department of the Treasury made a call recently for the public to provide feedback regarding illicit finance associated with digital assets. Recently, the FBI also released a warning to investors about the increasing exploitation of decentralized platforms (DeFi) platforms. FBI stated that investors should conduct thorough research to evaluate DeFi platforms before pouring their funds into them.