Chain analysts and law enforcement are raising concerns about a fraud scheme called “pig-butchering,” where criminals build relationships with victims online and lure them into fake cryptocurrency investments. According to Chainalysis, nearly $10 billion was sent on-chain through crypto scams in 2024, with pig-butchering revenue increasing by almost 40% compared to the previous year. The number of deposits into these scams surged by over 200%, even though the average deposit size dropped by about 55%. This trend suggests that scammers are now targeting a larger number of victims with smaller amounts, making their operations both profitable and difficult to track.
Behind these scams are organized networks, not individual fraudsters. Reports indicate that these groups function like criminal enterprises, sometimes employing trafficked workers in compounds to communicate with and manage victims. The grooming process can last for weeks or months, using emotional manipulation to generate steady income for these gangs. Research has linked some of these activities to Southeast Asia and groups that funnel money through concentrated crypto wallets.
Law enforcement and analysts also warn that generative AI and online service markets are making pig-butchering scams more efficient and cost-effective. AI tools are being used to create realistic chatbots, voice clones, and fake profiles, while marketplaces offer domain and hosting services that allow scammers to set up convincing investment websites. This combination enables fraudsters to expand their reach and target more people simultaneously.
Authorities are taking action against the infrastructure supporting these scams. The U.S. Treasury’s OFAC sanctioned a Philippines-based company, Funnull Technology Inc., and its alleged administrator for providing internet infrastructure and tools used by fraud networks. Chainalysis and other researchers connected Funnull’s services to sites involved in pig-butchering, with some investigations reporting U.S. losses exceeding $200 million. These sanctions aim to disrupt the web services that scammers rely on to appear legitimate.
Private companies are also contributing to the fight against fraud. In a coordinated effort with APAC law enforcement, Chainalysis, cryptocurrency exchanges, and stablecoin issuers helped trace and freeze nearly $47 million in USDT that scammers had consolidated into a few wallets. Previous actions in other cases have led to even larger freezes, demonstrating how industry collaboration can prevent criminals from cashing out cryptocurrency into traditional currency.
Frequently Asked Questions
Of course Here is a list of FAQs about the pigbutchering crypto scam and its national security implications with clear and direct answers
Basic Questions Understanding the Scam
1 What is a pigbutchering scam
Its a type of longterm online investment scam where criminals build a trusting relationship with a victim before convincing them to invest large sums of money into a fake crypto platform which they then steal
2 Why is it called pigbutchering
The name is a direct translation from the Chinese term Shzhpán It grimly compares the process to fattening a pig before slaughter reflecting how scammers groom their victims before stealing their life savings
3 How does the scam typically start
It often begins with a seemingly wrongnumber text message or a contact request on social media or dating apps The scammer strikes up a friendly or romantic conversation to build trust over weeks or months
4 What is the main goal of the scammer
Their primary goal is to convince you to send cryptocurrency to a fraudulent investment platform that they control Once you send money it is almost impossible to get back
Intermediate Questions Mechanics and Impact
5 How do they convince people to invest
After gaining trust the scammer will casually mention how theyve made great profits through a special crypto trading site or app They will offer to help you make money too often showing you fake profits on a controlled platform to lure in more funds
6 What makes this scam a national security threat
Studies warn that these scams are often run by large organized criminal syndicates some of which are linked to authoritarian governments The billions of dollars stolen can be used to fund other illegal activities that threaten global stability and security
7 Who is most often targeted by these scams
While anyone can be targeted these scammers often go after individuals who appear financially stable and potentially lonely or seeking connection making them more vulnerable to the longterm grooming process
8 Can you get your money back if youve been scammed
Unfortunately it is extremely difficult Because transactions are made with cryptocurrency they are largely irreversible Recovery is possible but rare and often requires immediate action through law enforcement and financial institutions
Advanced Practical Questions