‘Pig Butchering’ Romance Scams Rise 85 Times Since 2020

‘Pig Butchering’ Romance Scams Rise 85 Times Since 2020

According to a report from Chainalysis, there has been a rise in crypto activity related to ‘pig butchering’ romance scams, as it is now 85 times higher than it was in 2020.

The report revealed that revenue from these activities doubled from 2022 to 2023.

The scam

The report found that there was an increase in romance scams, even though the total value of scams declined.

There was a decline in the volume of Ponzi schemes in particular, which the authors of the report said was due to the bear market in 2023 and the high-profile investigations that acted as a deterrent.

Social engineering is used in pig butchering scams for building a romantic online relationship and eventually, the victim is tricked into providing the scammer access to their funds.

A few weeks into the relationship, the scammer suggests that the victim invests in crypto, as they are making a lot of money from it.

The lack of crypto knowledge of the victim is used to their advantage by the scammers because they confuse and trick them into handing over their funds.

Chainalysis’ Senior Investigator, Adam Hart, said that victim is usually asked to do something technical, which they are unlikely to understand.

He said that they continue convincing the victim to invest more into the app over time, with the victim having no idea that the app is backdoored.

The impact

The 2024 Crypto Crime Report from Chainalysis also disclosed that these romance scams have the worst financial impact on the victims.

In 2023, the average size of payments in romance scams was around $4,593, while NFT scams were about $3,095 on average.

Hart explained that victims find it easier to invest a disproportionate amount of money into something when they are not using a third-party investment service.

But, he added that the returns need to be higher for the scammer when the scam is targeting individual people.

The details

Those who fall for romance scams believe that they are investing in something a loved one is currently generating returns from due to which they are willing to invest more in it.

Hart said that since their trust is violated, the victims’ financial impact feels even worse. It is because they were under the impression that the person cared about them.

These scammers usually appear at a vulnerable time in their lives and end up ruining them financially. This can be difficult to handle psychologically.

Therefore, Hart said that a number of these romance scams are unreported because people are ashamed.

But, he added that when it is reported, a romance scam has an on-chain footprint different from any other scam.

Hart stated that while pig butchering scams do not involve putting all the money together in one big pot immediately, they do have addresses that could be specific to the victim.

Likewise, some of the addresses may not have been reported or blocked on any exchange, or wallet interface.

Other scams, like Ponzi schemes, usually accumulate money in one wallet before they pull the rug from beneath the victims.