Romance scams, the creation of fake profiles on dating apps to trick victims out of money, have found their way into the crypto world.
One of them has the rather unflattering term “pig slaughter” because the victim is “fattened” through flattery and praise and then enticed to first send some crypto and then more to a fraudulent investment scheme. The cybercriminal finally pulls the plug and disappears, “crashing” the victim’s finances.
Scams usually occur on dating sites and apps that target single and emotionally vulnerable people. It is also found on social networking sites.
According to a report by the Federal Bureau of Investigation (FBI), in 2019 China began to slaughter pigs. Now “alarmingly popular” in the US, law enforcement says at least $439 million (R7.1 billion) was stolen through pig slaughter in 2021.
The cybercriminal ring responsible for the recent surge in cases is using translation software to target Western victims.
One San Francisco man lost $1.2 million (19.4 million rand) – 30 years’ worth of savings, including his daughter’s education fund – after being targeted by a scammer who preyed on his vulnerability after losing his father.
Pig killings in California have tripled this year, ABC7 News reports, and they appear to be targeting the Asian community.
In January 2021, Interpol issued a Purple Notice – a type of informational briefing detailing criminal “methods, procedures, facilities, devices or hiding places” – detailing how cybercriminals have targeted emotionally vulnerable people on dating sites.
SA’s Staggering Catfishing Losses, Romance Scams, Cousin Kisses
Virtually synonymous with romance scams is catfishing, the act of pretending to be someone else online in order to commit fraud. The term is broader than romance scam or pig slaughter because it can include impersonating a friend or family member.
Techshielder’s research, based on 2020 data, revealed the following alarming facts about South Africa’s propensity to fall victim to this type of scam:
- South Africa is in the top 20 countries where people are most likely to fall victim to fisheries fraud;
- The average financial loss per fraudster in South Africa is a staggering £35,433 (R717,811), the second highest in the world; and
- SA suffered the world’s seventh largest total loss in 2020 at £6.7m (R136.4m).
Fake investment programs make it easy to steal
A Silicon Valley software developer who goes by the name “R” lost $1.3 million (R21 million) after a scammer named Zhang approached her on LinkedIn, ABC7 News reports.
Zhang offered a fake trading app that looked legitimate and convinced her to make three payments of $65,000 to the trading app. The app soon showed that “R” had apparently made a 20% return. So she emptied her retirement account – all $900,000 (14.6 million rand) – and then another $400,000 (6.5 million rand) that she borrowed from her husband. And then immediately lost everything.
Another problem the FBI faces is the use of legitimate programs. According to an FBI warning issued in July, 244 victims were identified as having been defrauded of $42.7 million (692 million rand) through the use of fake cryptocurrency investment programs.
In one heist, cybercriminals convinced 28 investors to download a program that used the logo and name of a real US financial institution and then inject cryptography into it.
When 13 of the 28 investors tried to withdraw their funds, they received an email saying they needed to pay a tax before they could do so. Even after paying the alleged tax, the victims were unable to collect their funds.
In total, they received $3.7 million (R60 million).
The second scam operated under the fictitious company name YiBit. It followed the same pattern. Victims deposited cryptocurrency into the app, but when they tried to withdraw their funds, they were told to pay taxes. In the end, they were unable to withdraw their funds.
Pig Slaughter, a step-by-step guide
An in-depth analysis of Pig Slaughter by blockchain analytics company Elliptic explains how the scam typically works.
The bond with the victim is usually nurtured weeks or months before the subject of crypto is broached.
Parenting is not always entirely romantic. Sometimes “sexual exploitation” takes place, a practice where a cybercriminal threatens to reveal sensitive photos or embarrassing details of a sexual nature, such as racy text messages, unless a certain amount of crypto is handed over.
But more often than not, it’s the promise of a “great opportunity” that gets victims to start the scam.
The blog echoes the trend of scammers targeting people in or from Asia and links to an 80-page script believed to be used by pig butchers to scam their victims.
The script is ominously titled The Last Pig-Killing Strategy.
How to stay safe
Elliptic’s analysis shows that 27% of dating profiles are fake and that “series of photos that can be used for romance scams” can be obtained on the dark web for as little as $20 (R324).
He advises users of dating apps to be wary of people who are too early to remember love or introduce cryptocurrency and then promise to be mentors on the matter.
Scammers also push the idea of building wealth and following your dreams, encouraging victims to dream big and strive for more.
Scammers often avoid video or voice calls.
The FBI warns investors to be wary of unsolicited download requests for investment programs and to verify that the company behind the program actually exists.
R. Paulo Delgado is a crypto writer with a knack for seeing the strange and human stories behind the always fascinating leaps and stumbles of this new asset class.