The Commodity Futures Trading Commission (CFTC) announced two new partnerships on September 11 aimed at combating pig butchering scams across the United States.
The CFTC’s Office of Customer Outreach and Education (OCEO) has initiated these partnerships to protect potential victims from these increasingly damaging fraud schemes.
CFTC and Private Regulators Partner to Fight Fraud
According to the CFTC’s statement, the agency is collaborating with the American Bankers Association Foundation and private regulators to distribute an infographic designed to educate consumers about the risks and tactics of pig butchering scams.
Crypto #investment or “relationship” scams are on the rise and @CFTC is releasing a prevention brochure in partnership with @ABABankers, @FBI, @FinCENnews, @FINRA, @HSI_HQ, @IRSnews, @SecretService, and @SEC_Investor_Ed. Learn more: https://t.co/Rc10CxD6An pic.twitter.com/W3SWNieJs3
— CFTC (@CFTC) September 11, 2024
In addition, the CFTC is working with the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association to create an investor alert.
This alert seeks to provide clear guidance on how pig butchering scammers manipulate victims into trusting them before defrauding them of their assets.
“Partnering with federal and state regulators as well as consumer protection groups and other organizations helps spread the CFTC’s customer education message and hopefully reaches people before they can get scammed,” said Melanie Devoe, Director of the CFTC’s Office of Customer Education and Outreach.
“These partnerships focus on a relationship confidence fraud, commonly referred to by perpetrators as ‘pig butchering,’ which is estimated to cost Americans billions each year,” she continued.
Pig Butchering Scams Gaining Traction
Pig butchering scams are increasingly common, especially in the cryptocurrency sector, and they can cause severe financial losses.
These fraud schemes occur when scammers exploit victims’ trust to gradually increase the amount of funds they receive, similar to fattening a pig before slaughter.
Earlier this year, Professor John Griffin from the University of Texas at Austin discovered that more than $75 billion had been lost to pig butchering scams between January 2020 and February 2024, with the stolen funds flowing into global cryptocurrency exchanges.
“These are large criminal networks, and they’re operating largely unscathed,” Griffin said in an interview with Time.
Part 2 of our mid-year crypto crime update is here! We discuss the latest scam trends, review on-chain activity related to child sexual abuse material (CSAM), and examine Huione Guarantee, an online marketplace exposed for facilitating cybercrimes. https://t.co/rJBtYVk7Gb
— Chainalysis (@chainalysis) August 29, 2024
According to Chainalysis’ 2024 Crypto Crime Mid-year Update, pig butchering scams have generated more revenue than any other type of fraud this year.
The report also emphasizes that scammers in the blockchain sector are shifting from traditional fraud methods towards pig butchering schemes, making regulatory alerts and warnings more important than ever.
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