The US Department of Justice has announced the seizure of $9 million from an organization that exploited over 70 victims through a practice known as “pig butchering.”
“Pig butchers” engage in romance scams or pose as successful cryptocurrency traders to entice victims into making purported investments providing fictitious returns. The FBI chose the term as it resembles the practice of fattening livestock before the slaughter.
Court documents say the criminal ring worked to target some 70 victims and persuaded them to make cryptocurrency deposits with what they claimed were trusted firms and cryptocurrency exchanges.
“In reality, the purported firms and cryptocurrency exchanges were non-existent trading platforms,” says the DOJ.
US Secret Service agents traced the victim deposits and found they’d been laundered through dozens of cryptocurrency addresses and exchanged for different cryptos.
The technique is known as “chain hopping.” It lets criminals “layer” the proceeds of criminal activity into new cryptocurrency ecosystems, in an effort to obfuscate the nature, source, control and ownership of those proceeds.
In this instance, the feds seized nearly $9 million worth of Tether, a cryptocurrency pegged to the US dollar. The funds were linked to multiple victim reports made through the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network.
These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division.
In October, last year, the FBI warned crypto investors to steer clear of social engineering schemes associated with “pig butchering,” and offered a comprehensive set of steps to spot and mitigate the risk of falling for such traps.
A month later, the feds seized seven domains linked to a known “pig butchering” campaign. Then, in December, four men were charged in Australia as part of an investigation into a “pig butchering” ring allegedly defrauding unsuspecting crypto investors of more than 100 million USD world-wide.
And in March, this year, the FBI again sounded the horn, issuing a public service announcement warning Americans that crypto scams were on the rise, inflicting more than $2 billion in losses over the past year.