Federal agencies unite to tackle surge in pig butchering crypto scams

The Commodity Futures Trading Commission (CFTC) has teamed up with several federal and private organizations to address the growing problem of crypto scams, particularly those known as “pig butchering.”

According to a press release on September 11, this initiative aims to raise awareness and prevent the billions in losses caused by these fraudulent schemes.

“Pig butchering” scams involve scammers building trust with victims through online relationships—often using text or dating apps—before convincing them to invest in fake cryptocurrency projects.

Once the funds are transferred, the scammers disappear, leaving victims with significant losses.

The latest Crypto Crime Report from Chainalysis has identified these scams as the most profitable type of crypto fraud in 2024, with billions lost to these schemes.

The CFTC's Office of Customer Outreach and Education (OCEO) will collaborate with the American Bankers Association Foundation, the U.S. Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA) to develop educational materials aimed at raising public awareness.

These resources include infographics that detail the stages of the scam and provide advice on recognizing warning signs and avoiding such schemes.

An investor alert has also been issued, advising consumers to stay vigilant against unsolicited messages that could lead to potential fraud.

In addition to its collaboration with these financial organizations, the CFTC is working with other federal agencies, including the Federal Bureau of Investigation (FBI), the Internal Revenue Service’s Criminal Investigation unit, and the Department of Homeland Security, to tackle the surge in scams more effectively.

Together, these agencies aim to provide the public with essential tools and knowledge to safeguard against fraud.

The Crypto Crime Report also revealed a sharp rise in the number of new scams, with 43% of scam inflows in 2024 directed to wallets that became active in the same year.

The efficiency of these scams has increased, as their average lifespan has decreased from 271 days in 2020 to just 42 days in 2024.

Scammers are employing shorter, more targeted campaigns, making it increasingly difficult for law enforcement to intervene.

Illicit marketplaces have also played a role in these scams, with scammers buying seasoned social media profiles to appear more credible.

Over the past two years, these marketplaces have processed over $10 million in cryptocurrency flows, further fueling the rise in fraudulent activities.