September 14, 2023
Pig Butchering – What to Know About this Virtual Currency Scam & FinCEN Alert FIN-2023-Alert005
The Financial Crimes Enforcement Network (FinCEN), on September 8, 2023, issued a critical alert (FIN-2023-Alert005) regarding a prevalent virtual currency investment scam known as "Pig Butchering". This alert serves as a warning to the public, financial institutions, and cryptocurrency service providers about the growing threat posed by this fraudulent scheme.
What is "Pig Butchering"?
"Pig Butchering" is a deceptive investment scam that primarily targets unsuspecting individuals interested in cryptocurrency investments. Perpetrators of this scheme can employ various tactics to lure victims into parting with their cryptocurrency holdings or funds, though these scams commonly begin as a romance scam. Unlike other types of scams in which smaller and more frequent transactions occur, the butcher’s goal is generally a large, single payday that may drain the life savings of victims.
Key Characteristics of the Scam:
- False Promises: Scammers promise high returns on investments with minimal risk, often claiming to use complex trading strategies or insider information.
- Fake Celebrity Endorsements: To gain credibility, fraudsters may use fabricated endorsements from celebrities, industry experts, or public figures.
- Pressure Tactics: Victims are often subjected to high-pressure sales tactics, urging them to invest quickly before the opportunity vanishes
- Smishing: Scammers send text messages purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords or credit card numbers.
- Phishing: Scammers send phishing emails or direct victims to fake websites that closely mimic legitimate cryptocurrency platforms.
- Ponzi Schemes: In some cases, funds from new investors are used to pay returns to earlier investors, creating a Ponzi-like structure.
FinCEN's Warning:
FinCEN's alert underscores the need for vigilance in the cryptocurrency investment space. They emphasize that investors should conduct thorough due diligence before investing in any cryptocurrency opportunity. Furthermore, individuals and businesses should be cautious of unsolicited investment offers and exercise skepticism when presented with overly promising investment proposals.
Actions to Protect Yourself:
- Verify Information: Always verify the legitimacy of investment opportunities by conducting independent research and seeking advice from trusted financial professionals.
- Beware of Red Flags: Be cautious of investment offers that promise guaranteed returns, pressure you to act quickly, or request large sums of money upfront.
- Use Trusted Platforms: Only use reputable cryptocurrency exchanges and investment platforms with a proven track record.
- Report Suspicious Activity: If you encounter a suspected cryptocurrency scam or fraudulent activity, report it to relevant authorities and your financial institution.
Bottom Line:
Cryptocurrency scams like "Pig Butchering" continue to pose a significant threat to investors. FinCEN's alert serves as a reminder to exercise caution and due diligence when considering any cryptocurrency investment opportunity. By staying informed and vigilant, individuals can protect themselves from falling victim to such fraudulent schemes.
Press Release: https://www.fincen.gov/news/news-releases/fincen-issues-alert-prevalent-virtual-currency-investment-scam-commonly-known
Alert: https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf
Authored by: Josh Mourning, CCBP
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