Cryptocurrency Fraud , Fraud Management & Cybercrime

US DOJ Seizes $112M Linked to Pig-Butchering Scams

6 Crypto Wallets Linked to Laundering Confidence Scam Proceeds
US DOJ Seizes $112M Linked to Pig-Butchering Scams
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The U.S. Department of Justice seized virtual assets worth $112 million in a crackdown on "pig butchering," a romance-based cryptocurrency investment scam.

See Also: Scams & Mule Defense: Real-Time Scam Prevention and Advanced Money Mule Detection

Authorities seized more than half the total amount from an account in Los Angeles. Cybercriminals used six accounts to launder funds from cryptocurrency confidence scams, federal prosecutors said.

The scammers enticed victims, with whom they had built long-term online relationships, to invest in fraudulent cryptocurrency trading platforms. They funneled the invested funds to their own accounts. In Los Angeles alone, authorities identified at least 10 victims. The last transfer of cryptocurrency occurred on March 21.

Pig-butchering scammers typically target victims through social networking, dating websites, and "misdialed" phone calls and text messages. After establishing a connection with the victims, the scammers lure them into "lucrative" crypto investment schemes, even setting up fabricated websites and mobile apps that display bogus investment portfolios with large returns to add an air of legitimacy to the scams. They can trick victims into downloading malicious smart contracts on their phones to access their cryptocurrency wallet software. The fraud gets its name from its Chinese name, Sha Zhu Pan, which translates to "pig butchering" - the pig in the scam being the victim.

Some scammers ask victims to withdraw cash and deposit it in bitcoin ATMs to make it easier to steal (see: 'Pig Butchering' Online Scam Sweeping English Speakers).

"The use of digital currency to commit fraud presents new challenges to victims and to law enforcement trying to recover lost funds - which likely total billions of dollars in the so-called 'pig butchering' schemes," said Martin Estrada, U. S. attorney for the Central District of California.

Cryptocurrency fraud, including pig butchering, made up most of 2022's $3.3 billion in investment fraud scams recorded by the FBI's Internet Crimes Complaint Center.

About the Author

Rashmi Ramesh

Rashmi Ramesh

Assistant Editor, Global News Desk, ISMG

Ramesh has seven years of experience writing and editing stories on finance, enterprise and consumer technology, and diversity and inclusion. She has previously worked at formerly News Corp-owned TechCircle, business daily The Economic Times and The New Indian Express.

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