CFTC Warns Against Pig Butchering Crypto Scams

According to Cointelegraph, the United States Commodity Futures Trading Commission (CFTC) has joined forces with the American Bankers Association Foundation and several federal regulators to alert consumers about 'pig butchering' crypto investment scams. This initiative involves the Securities and Exchange Commission (SEC) and other federal bodies working with the CFTC’s Office of Customer Outreach and Education (OCEO) to disseminate an informative infographic. The infographic, released on September 11, details the mechanics of pig butchering scams, illustrating how victims are targeted, groomed, and ultimately defrauded. It also provides guidance on what steps to take if one falls victim to such scams. The CFTC emphasizes that these scams often begin with scammers using social media to establish fake romantic relationships, thereby gaining the trust of their victims and luring them into fraudulent crypto investments. The regulator advises that the best way to avoid falling prey to these scams is to not engage with unsolicited communications. Melanie Devoe, director of the OCEO, highlighted the importance of collaboration with federal and state regulators, consumer protection groups, and other organizations to effectively spread the CFTC’s educational message and prevent potential scams. The infographic will also be shared by several federal agencies, including the SEC’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), the Department of Homeland Security, the Secret Service, the FBI, and the IRS. This latest effort follows a July partnership between the CFTC and the Justice Department’s computer crime team to host the first-ever conference aimed at combating pig butchering scams. The FBI reported on September 9 that Americans lost $5.6 billion to cryptocurrency fraud in 2023, a 45% increase from 2022, with over $215 million attributed to romance scams. Additionally, the Federal Trade Commission recently warned that crypto ATMs are increasingly being used by scammers. These scams typically involve fraudsters posing as customer service representatives and claiming there has been an identity theft or account breach. Victims are then directed to deposit funds into a crypto ATM using a QR code linked to the scammer’s wallet. In 2022, approximately $110 million was lost through this method, with individuals over 60 years old being three times more likely to be targeted than younger adults.