Pig Butchering Scams: What They Are and How to Detect Them

You hear your phone buzz and read a text from a number you don’t know. “Hello, is this [not your name]?” When you reply to this random texter to say they’ve reached the wrong person, they seem only too eager to keep you talking. Why? They’re trying to hook you into one of the most devastating financial frauds—a pig butchering scam.

What is a pig butchering scam?

In a pig butchering scam, fraudsters use social engineering tactics to trick victims into investing as much of their money as possible before revealing the investment is a fraud. The name comes from the Chinese phrase “Shāz Hū Pán” which translates to pig butchering and describes the idea of the scam.

How do pig butchering scams work?

Each variation follows the same pattern to begin—fraudsters trying to gain victims’ trust. They often establish contact via SMS or direct message on social apps. In some cases it could be a “wrong number” text on a messaging service. Other times, fraudsters take the romance scam route and solicit victims though dating apps. In any case, the follow up communication is always about building trust with the victim. This can take days or even weeks.

Once the fraudster feels they’ve reeled in the victim, they will bring up an investment opportunity. Typically these investments involve cryptocurrency because its both loosely regulated and easy to steal virtually. From this point on, the goal is to keep the victim convinced the opportunity is legitimate for as long as possible. That way they can get the victim to invest the maximum amount of money, or “fatten them up” before pulling the rug, revealing the scam, and making off with the victim’s money.

Scammers will set up convincing “crypto investment” websites and in many cases use popular crypto management platforms like coinbase. The malicious fake sites help them trick victims into signing over ownership of their investments to the scammer so the rug pull at the end is quick and easy.

Warning signs of a pig butchering scam

“Wrong number” text messages

The most common method to begin a pig butchering scam. Most often they will:

• Address you by the wrong name
• Share something friendly as if you know each other (“Looking forward to meeting you for basketball next Tuesday!”)
• Apologize when you correct them, but continue to flatter you and keep replying

Pushing talk about money and investing

Even though you’ve just started talking to this person and haven’t met face to face, they will feel comfortable sharing this “easy” investment opportunity. They will continue to bring up the investment scheme if you change the subject and almost always pitch cryptocurrency.

Proposing a “fail proof” way to make small returns on investment

This crypto scam usually aims to convince the victim they will only be mining cryptocurrency, or simply making small trades for small profits. Over the course of the scam these will all add up to huge losses.

Emotional manipulation

Social engineering is a cornerstone of pig butchering scams. In a romance scam, the fraudster will try “love bombing” the victim to make them feel special. Other times, they might try to use FOMO to make you feel you are missing a once in a lifetime chance for profit. They may even prey on financial hardships you share to convince you that you need this opportunity. Beware of anyone using these tactics, especially if you don’t know them personally.

Pushing you to use a “special” crypto service

A key piece of the pig butchering crypto fraud is that the scammer controls the service you’ll be using to invest. In some cases, this service gives them access to your crypto wallet outright. Other times, it allows the fraudster to show you false returns. Never trust a crypto service unless you have thoroughly vetted it yourself and can trust it’s safe.

Scammer showing “proof” by allowing small withdrawals early in the scam

To back up their promise of guaranteed returns, the scammer will allow you to withdraw money from the investment platform. This DOES NOT prove their scheme is legit. The scammer knows this is one of the final hurdles they need to jump to get you “all in,” then they can get you to invest as much as possible.

How to protect yourself from pig butchering scams

1. Don’t answer random or “wrong number” texts from contacts you don’t know
2. Be cautious about strangers you’re considering a romantic relationship with, and if they are “love bombing” then move on quickly
3. Never share personal informtaiton like your social security number, address, or bank account details with a stranger online
4. Don’t sign up for crypto investment platforms unless you’re positive they are legitimate and have verified it with third party sources
5. Don’t start investing in cryptocurrency at all unless you are confident you know exactly what you’re doing
6. Research any terms you don’t understand that a stranger mentions to you and confirm they are legit

How to prevent pig butchering scams

While staying aware of the warning signs is the best way to personally stay safe from pig butchering scams, banks are learning to can prevent them with the right tools.

AI and machine learning tools can detect crime rings that run wide-scale pig butchering scams and detect suspicious activity coming from good users’ bank accounts. Fraud software can spot large transfer amounts that differ from a person’s normal behavior and flag it for review. A bank employee can then investigate and block a transaction if it’s fraudulent.

Because these scams involve cryptocurrency, they can be hard to trace. That’s why banks aim to prevent the transfers from happening at all by noticing customers caught in scams. While there is work to be done on the first-party fraud front, the crime rings who run these scams are in a race against time with major financial institutions.