In response to the alarming rise of crypto-related fraud, the U.S. Commodity Futures Trading Commission (CFTC) has joined forces with federal agencies and the American Bankers Association to tackle a new and increasingly prevalent threat: “pig butchering” scams. These sophisticated scams, which now eclipse Ponzi schemes in terms of impact, involve luring victims into fake romantic relationships through social media to ultimately deceive them into making fraudulent cryptocurrency investments.
Raising Awareness on Crypto Fraud
To help protect consumers, the CFTC’s Office of Customer Outreach and Education has released an infographic explaining the methods used in these scams, highlighting how criminals build trust with their targets before stealing funds. The one-page guide offers key tips for avoiding these scams, urging individuals to remain cautious when approached by unfamiliar online contacts.
According to Melanie Devoe, director of the CFTC’s Office of Customer Education and Outreach (OCEO), pig butchering scams cost Americans billions of dollars each year. “These partnerships aim to educate the public and prevent relationship confidence fraud, commonly referred to as pig butchering, before victims even respond to suspicious messages,” she said. Federal agencies, including the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI), have joined the CFTC in distributing the infographic as part of the broader awareness campaign.
A Growing Threat
The term “pig butchering” refers to scammers “fattening” their victims over time by establishing emotional bonds before ultimately defrauding them. This approach has proven more profitable than traditional Ponzi schemes, with a more targeted focus yielding higher returns. In 2023 alone, the FBI reported $5.6 billion in losses tied to crypto-related fraud, with $215 million specifically linked to romance scams. Moreover, the Federal Trade Commission (FTC) has flagged a significant rise in the use of crypto ATMs by fraudsters, resulting in over $110 million in theft last year.
By partnering with other government entities and financial organizations, the CFTC is hopeful that these collaborative efforts will curtail the growing threat and protect more consumers from falling prey to these scams.
Related topics:
X Empire Introduces NFT Vouchers for Early Token Access
BTC Hits $58K, FTM & POPCAT Lead Crypto Gains
Metalpha’s Ethereum Sell-Off: Potential to Dump 51,300 ETH by Week’s End
