‘“Pig butchering,” called a “prominent virtual currency investment scam” by Treasury’s financial crimes enforcement unit, is the target of an alert issued Friday warning of the swindle by the agency.
According to the Financial Crimes Enforcement Network (FinCEN), the moniker for the scam comes from its resemblance to the practice of fattening hogs before slaughter. The agency said the scam operates by victims (referred to as “pigs”) investing in supposedly legitimate virtual currency investment opportunities before they are conned out of their money. FinCEN asserted that scammers may leverage fictitious identities, the guise of potential relationships, and elaborate storylines to “fatten up” the pigs into believing they are in trusted partnerships before they defraud the victims of their assets—the so-called “butchering.”
“These scams are largely perpetrated by criminal enterprises based in Southeast Asia who use victims of labor trafficking to conduct outreach to millions of unsuspecting individuals around the world,” FinCEN said.
The agency estimated that losses to victims total in the billions to “pig butchering” and other virtual currency investment frauds.
The alert, FinCEN said, explains the scam’s methodology. It provides behavioral, financial, and technical red flags to help financial institutions identify and report related suspicious activity; and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA). In particular, the agency noted that Suspicious Activity Reports (SARs) filed by financial institutions can enable law enforcement to both aid victims and track down perpetrators.