The FBI warned crypto investors on Monday of a social engineering scam known as Pig Butchering, where victims are offered fraudulent returns to encourage additional investments.
The FBI Miami Field Office and the Internet Crime Complaint Center (IC3) alerted investors that threat actors first establish contact on various social media or dating applications. They either pose as long lost contacts known to the victim or as a potential friend or romantic partner.
Scam Process and Mitigations
According to the FBI, the perpetrators are patient and composed, and are willing to spend a lot of time gaining a victim’s trust. After establishing trust, victims are then coached through the investment process and encouraged to make deposits.
“The fake websites/apps allow the victims to track their investments and give the impression they are growing exponentially,” read the Bureau’s alert. “When the victims attempt to cash out their investments, they are told they need to pay income taxes or additional fees, causing them to lose additional funds.”
Afterwards, the victims then lose contact with the threat actors and never receive their supposed investments.
“Individual losses related to these schemes ranged from tens of thousands to millions of dollars,” the FBI added.
If you’re an investor in the crypto market, the Bureau said to always verify the validity of an investment opportunity from strangers or long-lost contacts and to be on the lookout for domain names that impersonate legitimate financial institutions, especially cryptocurrency exchanges.
The FBI also said to watch out for misspelled (spoofed) URLs, suspicious-looking apps posing as investment tools, and any opportunities that sound too good to be true.
‘Pig Butchering’ on the Rise
According to a report from the Bureau earlier this year, the name “Pig Butchering” was picked to reflect how cybercriminals “feed their victims with promises of romance and riches before cutting them off and taking all their money.”
Last month, Forbes also reported how one victim lost $1 million to a Pig Butchering scam.
If you believe you’ve fallen victim to Pig Butchering, the FBI said you should immediately file a report with the Internet Crime Complaint Center at www.ic3.gov.