The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing this alert to U.S. financial institutions and the broader public to bring attention to a prominent virtual currency investment scam called “pig butchering.”
These scams are referred to as “pig butchering” as they resemble the practice of fattening a hog before slaughter. The victims in this situation are referred to as “pigs” by the scammers who leverage fictitious identities, the guise of potential relationships, and elaborate storylines to “fatten up” the victim into believing they are in trusted partnerships. The scammers then refer to “butchering” or “slaughtering” the victim after victim assets are stolen, causing the victims financial and emotional harm. In many cases, the “butchering” phase involves convincing victims to invest in virtual currency, or in some cases, over-the-counter foreign exchange schemes —all with the intent of defrauding them of their investment. Pig butchering scams are largely perpetrated by criminal organizations based in Southeast Asia who use victims of labor trafficking to conduct outreach to millions of unsuspecting individuals around the world. Multiple U.S. law enforcement sources estimate victims in the United States have lost billions of dollars to these scams and other virtual currency investment frauds.
This alert explains the pig butchering scam methodology, provides red flag indicators to assist with identifying and reporting related suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA). Pig butchering scams are linked to fraud and certain types of cybercrime, which are two of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Priorities.
Click here to read the full ALERT on the Methodology of a Pig Butchering Scam.
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