The dating app profile has a photo of a gym flex while the job field has only the elusive “crypto” as an answer.
While it may sound like the much less luxe start of Netflix (NFLX) ‘s “Tindler Swindler,” online scams are often easier to recognize after the fact. While many are getting exposed, new versions of some crypto scams seem to be popping up daily.
The latest fraud to be making the rounds carries a particularly gruesome name and targets people on dating apps and social media platforms. It’s known as “pig butchering” or “pig slaughtering,” in a reference to “fattening up” a victim before doing the damage.
Authorities have long been drawing attention to criminals who use the hype around bitcoin and ethereum’s success to get people to invest in other tokens that turn out to be little more than Ponzi schemes.
Why Is It Called Pig Butchering?
The latest scam, however, is more nefarious in that it doesn’t rely on shady emails about “buying some crypto.” Instead, the scammer finds a person who is already looking for love and friendship and builds trust by conversation over the course of weeks or even months.
“The criminal is fattening [the victim] up for slaughter by building trust,” Brent Campbell, managing director of the NXS Crypto Fund, told TheStreet in an interview.”[…] They have a script for the college kid and a script for those in their 20s as well as those in their 50s and retired. They know exactly how to make that person gain trust over time and, only after a month or two, do they say ‘hey, check out this site or this token.'”
What follows next is almost formulaic in its simplicity — the scammer sends a victim to a site that looks like a crypto startup and gets them to transfer money into a platform that is actually connected to the scammer’s wallet.
Sometimes, they’ll wait another few months so that the person can check their balance and, seeing that it is on the fake “account,” keep adding more. But the result is almost always that the site becomes a broken link while both the scammer and the money disappear.
While it may seem like like something for only the most gullible, Campbell said the scammers take great pains to not only build a site that looks professional but also research the victims online so that they can appear interested in their life.
Who’s A Potential Victim?
It often works because it specifically targets people who are lonely and specifically looking for either love or socialization.
Often, the scammers are chatting to four or five potential victims at a time; while most will recognize it as a scam and run for the hills, even one transfer of a couple of thousand will make the dishonest endeavor worth their time.
“Pig butchering” is growing increasingly common. This week, Florida’s Chief Financial Officer Jimmy Patronis warned residents of the state about millions being stolen “from unsuspecting investors” in this way.
One scammer in the Bay Area got an accountant to transfer over $1.2 million to a nonexisting crypto startup by talking and providing emotional “support” at a time when his father was dying.
With even established cryptocurrencies like bitcoin on a downturn and many smaller ones being exposed as scams, some may feel like it’s best not to even bother with crypto.
But according to Campbell, there are a number of things one can do to not become prey if the desire to invest hits. The most important one is that interest in investing should come from personal interest and research rather than someone who pops up and says “you have to invest in this!”
“Sometimes it’s as simple as going on Reddit, Twitter (TWTR) or Crypto Twitter and finding other people saying ‘this is a fraud, right?'” Campbell said.
What to Do When Someone On A Dating Site Starts Hawking Crypto
The other obvious bit of advice is to do all one’s trading through an established platform like Coinbase (COIN) or Binance where every account and transfer can be tracked.
“If you really want to buy crypto, it’s better to have exchange where you do everything from one wallet,” Campbell said. “But any talk of finances within the first couple of months should already place you on high alert.”
Other ways to protect yourself include reading up on the company (does it have news articles from large outlets about it?) and evaluating the site (does it have misspellings or bad interface?).
As scam sites can look quite professional, another option is to run it through the Wayback Machine to check how long it’s been around.
While everyone wants to be the one who “knew about bitcoin,” a new token is a major red flag — with even major players like bitcoin and ethereum down more than 50% in the year so far, even legitimate smaller cryptocurrencies are burning out amid the current downturn.
But as investing always comes with taking risks, those truly interested should at least limit themselves to an amount that they are not afraid to lose (say, $50 to $100) and take errors as a learning opportunity.
“There’s a lot of really interesting and value-oriented things happening in crypto that’s being masked by all this fraud and crazy stuff happening,” Campbell said. “Basically, you just need to go out with your eyes wide open and use proper security. Don’t transfer $20,000 to a wallet you don’t know how to secure.”