Pig butchering: large-scale cryptocurrency fraud

We explain what a pig butchering scam is: how it works, why it’s dangerous, and how to protect yourself from it.

How to protect yourself from the pig butchering scam

Today, we’re discussing the increasingly common scam known as pig butchering. Due to its high profitability, this scheme is rapidly gaining popularity among fraudsters, and the number of victims is constantly growing. What is it? How does it work? And how can you protect yourself? We’ll cover it all in today’s post.

What is pig butchering and how does this scam work?

Pig butchering is a type of scam associated, on the one hand, with investing (often in cryptocurrencies), and on the other, with online romantic relationships.

Just as pigs are raised for a long time before being slaughtered, in the pig butchering fraud scheme, scammers typically spend a lot of time and effort carefully courting their victims — usually over a period of weeks or even months. In this regard, pig butchering differs significantly from other fraudulent schemes, whose creators are often impatient and looking for quick profits.

The setup: a random message and a friendly stranger

It all starts with some random message in a messenger, social network or SMS. The scammer either pretends to have sent the message to the wrong recipient or refers to some distant mutual acquaintance that are easy to find and collect information about from the victim’s social media profile. If the victim responds to the scammer, saying something like “You’ve got the wrong number”, the scammer politely apologizes and tries to initiate a casual conversation. Message by message, an ongoing relationship develops between victim and scammer.

It should be noted here that scammers often deliberately select the victims based on their status and personal traits. That is, they look for reasonably well-off but perhaps lonely and vulnerable individuals who may not be opposed to engaging in conversation with a friendly stranger. At this stage, the scammer’s goal is to build at least friendly relations with the victim and, ideally, a romantic connection.

Thus, the scammer gains the victim’s trust and lulls their vigilance. As mentioned earlier, these scammers are usually in no rush and spend a lot of time communicating with the victim, which is uncharacteristic of online fraudsters. So even if the victim has some suspicions at first, they tend to fade away after a while.

The plot thickens: an opportunity to invest profitably

Sooner or later, the scammer finds a way to steer the conversation toward financial topics. Specific approaches here may vary, but the general idea is that the scammer carefully presents the victim with an opportunity to make a profitable investment.

This could be something traditional like stocks, bonds, futures or options. But lately, it’s more often associated with some “promising” cryptocurrency projects. The overall complexity and opacity of crypto, coupled with the ease of moving funds, make it ideal for such fraud.

At this stage, the victim may become alarmed and suspect something is amiss. However, the scammer is quick to reassure their precious… pig: there’s no need for the victim to transfer any money personally to them or anyone associated with them. All the victim needs do is simply create an account on a trading platform and try to deposit some money there to see how it works.

Climax: incredible profits and new money deposits

An important detail of the pig butchering scheme is that at every stage the scammer carefully maintains the victim’s illusion of control. The victim independently creates an account on the trading platform and can independently choose what to trade there. The scammer only provides helpful advice, making the whole process faster and easier — and of course, as profitable as possible.

The scammer’s trading tips turn out to work well — who would have guessed it? The victim quickly makes their first profit on the trading platform, gets excited, and starts depositing more and more for even bigger earnings.

Finale: the scammer vanishes with the money

But of course, sooner or later, the scammer absconds. This usually happens once a reasonable balance has formed in the account. Alternatively, the scammer may milk the victim until the moment they try to withdraw money from the platform.

That’s when the victim learns the truth: the trading platform was fake, and all those incredible profits just disappeared into thin air. As for the real money, it has long gone to some unknown account. At this stage, the scammer cuts all communication with the victim, deletes the accounts used for the scam, and — poof! — vanishes in a puff of smoke.

The victim has lost everything invested in the platform, and we’re usually talking significant amounts: the fraudsters often manage to get away with tens or even hundreds of thousands of dollars — sometimes even millions.

Scam farms in Southeast Asia

As you may have gathered from the description of pig butchering, this scheme has several key differences from most scams. First, the criminals come well-prepared — they have effective tools to deceive their victims. Second, they’re in no hurry and are ready to work on a single target for a long time, gradually moving toward their sinister goal. Third, we’re talking about truly large sums of money — meaning the amount of time and effort involved eventually pays off.

The secret to this success is that, in the vast majority of cases, it’s not individual scammers who are behind pig butchering, but large criminal groups. These organizations run huge fraudulent “farms”, most often located in the least prosperous countries of Southeast Asia. Such farms exist in Laos and the Philippines, but most farms are in Cambodia and, above all, Myanmar, where a civil war has been going on for several years.

KK Park: one of the largest scam farms

One of the largest scam farms engaged in pig butchering — KK Park. This farm, located in Myanmar near the border with Thailand, employs over 2000 people. Source

These enterprises are truly massive: for example, a report last year about one of the largest scam farms, called KK Park, claimed that over 2000 people work there, and it has even earned its own article on Wikipedia. Moreover, the farms are constantly expanding and, of course, new ones are being opened.

Generally speaking, these fraud farms should more accurately be called labor camps — and this is perhaps the saddest detail of this scheme. For it turns out that the rank-and-file operators of pig butchering — the ones who directly communicate with the victims — are usually doing so against their own will.

Scam enterprises require highly skilled, well-educated, multilingual employees with strong online communication abilities. As you might imagine, such people don’t naturally appear in the jungles of Myanmar or Cambodia. Usually, these are citizens of other countries who are lured by the promise of high-paying jobs — call center operators, SMM specialists, translators or IT specialists.

Construction of a new building at the KKII farm

Scam farms are constantly expanding: this photo, taken on July 1, 2023, shows the construction of a new building at KKII — a newer part of KK Park. Most likely, it has already been completed by now. Source

Usually, new scam-farm workers first end up in neighboring Thailand, from where they’re taken to Myanmar or Cambodia. There they’re transported to a camp located far away from any large populated areas and have their documents confiscated. Then these people essentially become slaves: they’re forced to work 12-16 hours a day for nothing but food, can be subjected to violence, and sometimes even resold to other fraudsters.

The overall scale of the problem is extremely serious. A report last year by the UN Office of the High Commissioner for Human Rights, citing reliable sources, gave the following figures: at least 120,000 people are employed in scam farms in Myanmar, and approximately another 100,000 in Cambodia.

How to protect yourself from pig butchering

It’s difficult to calculate the exact total losses of pig butchering victims because it’s a global problem — scammers target citizens of different countries. In addition, not everyone reports that they’ve been a victim. However, rough estimates suggest the size of the pig butchering industry runs to billions of dollars.

It’s a very lucrative business, so there’s no use hoping the problem will simply go away by itself. Nor is there any hope that the authorities in Cambodia or Myanmar will address it — they appear to have other priorities. Therefore, unfortunately, we must protect ourselves and our loved ones on our own. Here’s what we can advise:

  • Be cautious with random online acquaintances — even if the person has been communicating with you for a long time and doesn’t seem to be a scammer.
  • Don’t invest carelessly in obscure investment schemes — even if they apparently demonstrate high profitability.
  • In particular, don’t invest carelessly in cryptocurrency schemes, as due to the quirks of this topic the number of scammers in this sphere is unfortunately very high. Additionally, it’s important to note that all blockchain transactions are irreversible and uninsured.
  • Remember the golden rule of investing: the higher the potential profit — the higher the risk. When it comes to risky schemes, never invest money that you are not prepared to lose.
  • Inform your family and close ones about this fraudulent scheme — it’s possible that this could protect them from financial loss, plus the inevitable psychological trauma resulting from such deep deception.