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Romance scams are when bad actors lurk in dating apps, chat rooms and social media with the plan to trick victims into eventually sending them money. This typology of fraud recently caught the attention of a popular Netflix series Tinder Swindler. It focuses on Shimon Heyada Hayut – better known by his scammer alias, Simon Leviev – who tricked numerous young women into sending him hundreds of thousands of dollars after defrauding his victims and then extorting money from them with fictitious emergencies.
This is not a new criminal typology; indeed, romance scams existed before the internet. However, with globally available email, popular chat forums and the rise of dating apps, there has been an undercurrent of romance scams all over the internet for several years now – even creating communities to try to scam the romance scammer.
Within the crypto world, the prize is cryptoassets – be they digital assets, NFTs, or other blockchain-based funds. This typology of fraud is often referred to as “pig butchering,” as the victim is fattened up with attention and praise, then cruelly “killed” while stealing their funds.
How does pig slaughter work?
Criminals will usually pose as attractive, tech-savvy women or men and build a relationship over weeks or months, first befriending the victim and then tricking them into thinking romantic feelings are involved.
At some stage, they will introduce the idea of cryptocurrency with the ultimate goal of rewarding funds from the victim. There are a number of guises under which this is done, but it usually involves the scammer sharing an investment opportunity with the victim, creating a story where they need funds for their safety or an emergency, or even extorting nude pictures or explicit messages to be sent.
Most often, the criminal will hook the victim with a “big opportunity” that they allegedly used to make money. This is usually through a mining scheme where they have staked criminal claims or using trading services – often with enticing AI/machine learning capabilities.
The criminal will then send the victim a “personal referral link” to access a mining pool or investment service, and she will then be instructed to send the cryptoasset to the address. This is often in the guise of confusingly technical – but usually completely inaccurate – instructions in an attempt to deceive the victim, such as: “You must pay a ‘mining fee’ to obtain a ‘blockchain certificate’ that authorizes you as a ‘node.’”
However, when the user sends the cryptoasset to the address, the fraudster will spend their funds. This trick may be a one-off exercise by the criminal, or they may seek to maintain a relationship with the victim and make small monthly payments to keep the victim and invest more.
Elliptic found that one wallet linked to a mining scam stole an average of $33,733 from each of its victims – earning over $1 million in Tether.
In other cases where victims were lured into using a fraudulent investment platform, one person lost $12,600 of their savings and it wasn’t until six months after the first contact that the person became aware that they were interacting with a scammer. Elsewhere, a 24-year-old lost $390,000 of her inheritance money after being tricked into investing from Hinge dates.
Who is the target of the butchery scam?
According to Global Anti-Scam, 41% of these crimes are committed on social networks such as Facebook, Instagram and Whatsapp. It was found that 67% of the victims are women between the ages of 25 and 40, and 32% of them have a diploma. Interestingly, the trend seems to be targeting victims in and from Asia, with many examples and screenshots including Chinese language and many victim personal stories involving Asian-specific dating apps and profiles of attractive young Asian women.
Accordingly, in a post on Reddit, a user showed a screenshot of an 80-page script allegedly used by romance scammers with a title (written in Chinese) that included a reference to targeting “foreign” (non-Chinese) markets. The manual also contained advice on how to “package” yourself more realistically – for example, choosing a credible job, hobbies and luring victims by sharing (fake) childhood stories. Findings from the Global Anti-Scam Report revealed that 25% of all dating app users have lost some amount of money to a romance scam, so this is the predominant typology of scams that many online daters encounter.
How much was stolen from the pig slaughterhouse?
It is difficult to put an exact figure on this typology of fraud, as many victims will feel uncomfortable coming forward and reporting the crime. According to Global Anti-Scams, 37% of victims did not report falling victim to a romance scam even though the average loss per victim is $121,926 and over 75% of victims lose more than half of their net worth to the scam. . UK Finance predicts that over £21m ($25m) will be stolen from romance scams in 2020. This represents a 17% increase on 2019 – likely due to the shift to online dating due to the pandemic. The potential reward is so enticing to criminals that there are even training centers being set up to teach would-be crooks how to carry out pig butcher crimes, and many illegal actors will have dozens of victims at any one time.
What does the regulation say about this topic?
The UK statutory definition of fraud is broad and covers digital assets. Essentially, it seems to take into account whether a person has made a deliberate misrepresentation with the intention of either making a profit or a loss or a potential loss to another person.
In January 2022, the UK House of Commons Treasury Committee published the “Eleventh Report on Economic Crime for Session 2021-22”. It covers a number of areas of economic crime, including crypto-assets, but also recommends that the Economic Crime Plan 2022 should consider introducing measures specifically to protect consumers from fraud and crypto-asset fraud.
However, in practice it is difficult to identify consumer protection measures in frameworks that are not clear enough – especially in relation to crypto assets. Furthermore, the report generally questions the resources available to the police to tackle the scale of financial crime. Click here for more information on the cryptoasset scam report.
How to protect yourself and recognize fraud related to pig slaughter
With 27% of dating profiles reported as fake, and photo sets that can be used for love scams available for as little as $20 on the dark web, there are plenty of pig butchers to be wary of. To protect yourself from this type of scam, watch out for the following red flags:
- They focus on destiny, wealth creation and self-improvement, while pushing you to think and dream bigger about your ambitions.
- They introduce cryptocurrencies and offer to be a mentor/teacher/coach or invest on your behalf.
- They bring up the topic of love very early and try to push the relationship very quickly.
- They refuse video or voice calls – often citing technology issues or past trauma, or they agree and put it off each time.
- They send or share displays of wealth, often by accident, and may imply that they are the result of investment or trading activities.
If you are in a crypto-business and process or receive crypto transactions, then it is important to monitor transactions and check crypto-asset addresses to be aware of any illicit links to, for example, pig slaughter scams. This can help protect you from processing transactions by fraudsters or receiving funds from illegal actors looking to cash in on pig slaughter activities.
Crypto Crime Global Compliance
