As a victim of a new, fast-growing type of crypto romance scheme called “pig butchering,” Divya (who asked to keep her last name private) has a lot of company. According to the FBI, more than 20,000 people in the U.S. fell victim to romance fraud and lost a total approaching $1 billion last year. But Divya sadly might hold the record as the biggest loser to this growing type of swindle.
Authorities say the average loss per victim of the scheme is around $180,000, but Divya, according to a lawsuit filed against one alleged pig butcher, saw more than $8 million in cryptocurrency disappear into the fraudulent void.
“I’m generally a pretty sensible person,” Divya says. “I’m very giving, I like to volunteer. I won’t just give money away blindly.”
The term “pig butchering” is from the Chinese “Shāzhūpán,” (殺豬盤) as the scheme apparently originated in China. The con man – and it’s almost always a man – builds a months or weeks-long romantic relationship with the victim through online dating platforms such as Tinder, Grindr, and Bumble. According to Divya’s lawsuit, “the offender showers the victim with messages of love and affection to emotionally ‘fatten them up’ – similar to fattening a pig …before enticing the victim to invest in a fake [crypto] company and, metaphorically, slaughtering the victim.” This slaughter typically involves getting the victim to put real money into fake crypto investments.
Pig butchering victims
That the thieves managed to con Divya, an educated businesswoman in her 20s, speaks to the insidious nature of the plot, and to its highly organized and sophisticated methods. In fact, statistics show 67% of the victims are single women between the ages 25 and 40, and most were highly educated and adept with modern technology.
“A common factor among victims may simply be their unfamiliarity with how regulated brokers should work,”and having “large savings,” according to the Global Anti-Scam Organization, a non-profit advocacy group for pig butchering victims.
And there are plenty of victims.
Cynthia, a young Asian woman in Canada, says she lost all her savings to a pig butcher. “I never thought in a million years I’d fall victim to a scam, especially through online dating,” she posted on YouTube. “But hey, shit happens, and I’m trying my best not to blame myself or fall into a perpetual spiral of self-hate.”
A Los Angeles woman who calls herself Velvet Kat, says she lost thousands to the scam. “Scammers pretend to be attractive and wealthy, always too busy to see you, have an excuse why they won’t video call, text daily, pretend to teach you crypto with a fake app they link you,” she wrote.
Cindy Tsai, a Boston-area woman who was being treated for terminal cancer, says she met “Jimmy,” a local Asian American single on Whatsapp, who comforted her through her treatments, but then stole $2.4 million in crypto investments.
Steve Belcher, a software engineer in Denver, says he lost $1.6 million after falling for a woman on a dating app.
PJ Jenkins, a retired police officer in New Jersey lost $15,000 to “Alice,” a scammer he met on Hinge and began a months-long relationship before investing in cryptocurrency.
Divya’s story
Divya met “Jerry Bulasa” on Tinder and began communicating frequently over WhatsApp, according to her lawsuit filed against three individuals, two banks, and two crypto platforms. “Bulasa sparked and built what appeared to be a deeply-held affection for, and interest in, one another,” according to the suit.
Like in almost all the other schemes, as the online relationship grew,Bulasa induced her to transfer money to a seemingly legitimate crypto platform with promises of financial gains through cryptocurrency investments.
“At first I was like, ‘hey, dude, I don’t know you. I’m not gonna send you my money.’ And he said that’s fine, just send it to the platform where I had my own account,” she said.
Divya, who had some experience trading with Coinbase, researched the site and the method of investing Bulasa was suggesting, and it all seemed legit.
“We’ve had romance scams all the time. Those are old. But in the digital world, love plus crypto is a match made in scam heaven and it just creates a whole other avenue.”
“Initially, when I was doing my research I wondered if one can actually trade Bitcoin options,” she said. “And yeah, you can really do that. And I’ve actually done Forex trading, so I figured okay, I’ve done this before, so it doesn’t sound that fishy.”
Divya was pointed to an app and website where she could track the performance of her investments and the scammers seemingly matched or added money of their own that would show up on the sites. And it showed she was making impressive gains. The problem, though, first surfaced when she tried to withdraw funds.
“What happened was, and it’s something that’s common with people who are in this same kind of scam, is that the trading platform will tell you have to first pay taxes on your gains,” she said. “And that’s how they got the rest of the money out of me. Not by telling me to invest more but just paying what’s needed to get the money out.”
“And that was kind of an emotional torment. They just kept telling me everything would be okay, but they kept hitting me with more and more fees and taxes. They knew I was getting scared but they kept saying ‘don’t worry, you’ll get your money.’”
By this time, she said, she was mostly communicating with the platform, not the supposed paramour.
How law enforcement is trying to catch up
The scam started in mainland China in perhaps 2019, the Global Anti-Scam Organization says, but it then relocated to areas off Southeast Asia, including Myanmar, Cambodia, Malaysia, Thailand, and Laos, where the governments tend to look the other way.
“The local governments are complicit with these scams because they’re bringing in a lot of money,” said Grace Yuen, a representative for GASO. “There are some big bosses there who we believe are cronies with local governments and they have large buildings, essentially dormitories, full of Chinese nationals. They look like call centers involved in E-Commerce.”
Yuen says the workers at these compounds have their passports seized and are working to get home. They are given fake but realistic looking profiles on social media they use to entice victims.
Catching them is made difficult for U.S. authorities because the swindlers are almost always foreign-based and disguise their identities and internet accounts. It doesn’t help that they deal in cryptocurrency, which can be traded anonymously.
Meanwhile, trying to close a fraudulent crypto platform can feel like playing Whack-a-Mole.
“The problem is when we shut down a website they just created a new one,” said Miles Faggert, a special agent in the Alabama Securities Commission, which just moved to try and legally close several crypto platforms operating in the state.
Though the state has received just three pig-butchering complaints it has formed a task force in the anticipation of more, “But I think the remedy is going to be making the public aware of what’s going on so they don’t fall victim to it. That’s going to be easier than shutting down the websites.”
Law enforcement is also admittedly new to the territory, and the learning curve is huge.
“Nobody could conceive of cryptocurrency just a few years ago,” said Amanda W. Senn, Chief Deputy Director of Alabama Securities Commission. “We’ve had romance scams all the time. Those are old. But in the digital world, love plus crypto is a match made in scam heaven and it just creates a whole other avenue.”
The U.S. Justice Department has said it formed a task force on cryptocurrency scams but it’s just getting started. The government has not yet adopted any regulatory standards, so for now it’s left up to individual states to enforce the crimes. Victims say their complaints are frequently met with blank stares as local authorities don’t understand the new jargon and technology.
The legitimate companies involved, like Coinbase and Tether, leave it to individuals to determine who they’re doing business with.
So, at least, for now, stopping the scams may be difficult, and the best approach is to remain vigilant . Divya says she has turned to legitimate cryptocurrency tracking firms and learned how to look up blockchain wallet addresses and believes she’s tracked her money. But getting it back is another matter.
“I want people to know what happened to me,” she said. “But I don’t want it to happen to them.”
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