Crypto Romance Scams: How To Avoid Pig-Butchering Fraud

Crypto romance scams, also known as pig-butchering scams, involve fraudsters forming deceptive online relationships to trick individuals into investing in fraudulent cryptocurrency schemes. 

It starts by scammers building trust over time, expressing affection, and then presenting fabricated financial needs or investment opportunities related to crypto.

Victims, believing they are helping a partner or capitalizing on a promising investment, transfer funds directly to the scammer’s crypto wallet.

The combination of emotional manipulation and the promise of high financial returns makes these scams particularly effective.

According to a new report by Chainalysis released on 13 February, crypto scams not only reached $9.9bn in 2024, but they are becoming even more sophisticated thanks to AI – with pig-butchering scams in particular increasing by 40% year-on-year.

In this article, we will look at the methods scammers use, warning signs, real-life case studies, and the effects on victims. We will also guide you on how you can save yourself from falling prey to such scams.

Key takeaways

• Crypto romance scams, also known as ‘pig-butchering’ scams, involve scammers building fake online relationships to manipulate individuals into sending money through crypto.
• Recognizing red flags like quick declarations of love, reluctance to meet in person, inconsistent personal details, and requests for money can help identify potential scams.
• Victims often face financial losses, emotional distress, and social isolation. In some cases, they may unknowingly become involved in illegal activities such as money-laundering.
• Reporting suspicious activities and seeking help from law enforcement and financial institutions are crucial steps in avoiding losses and preventing future scams.

Overview of crypto romance scams

Crypto romance scams are used to build fake online relationships to trick individuals into sending them money, often through crypto. These scammers typically create convincing profiles on dating apps or social media platforms, posing as genuine individuals seeking companionship. They invest time in gaining the victim’s trust and affection, making the relationship seem authentic.

Once trust is established, the scammer introduces financial requests. They might fabricate emergencies, such as medical issues or legal troubles, and ask for financial help. Alternatively, they may propose profitable investment opportunities in cryptocurrencies and promise high returns. Believing they are assisting a loved one or making a sound investment, victims transfer funds.

These scams exploit both emotional vulnerabilities and the complexities of crypto transactions. The use of crypto makes it harder to trace and recover funds, increasing the scam’s effectiveness. Victims suffer financial losses and emotional distress upon realizing the relationship was a deception.

Understanding crypto romance scams is important for recognizing and avoiding them. Awareness of their tactics can help individuals protect themselves and others from falling victim to these fraudulent schemes.

Common tactics used by scammers

Scammers use various tactics in crypto romance scams to deceive individuals into sending them money or personal information. Common methods include:

Creating fake profiles

• Scammers set up appealing profiles on dating apps and social media. This is often done using stolen photos and fake details to appear genuine.

Building emotional connections

• They express strong emotions early in the interaction to establish trust and emotional dependence.

Avoiding face-to-face interaction

• Scammers provide reasons to avoid video calls or in-person meetings, such as claiming to be overseas or having technical issues.

Fabricating emergencies

• They create urgent situations like medical emergencies or legal troubles, asking for financial assistance to resolve these fabricated crises.

Proposing fake investment opportunities

• Scammers suggest investing in fraudulent crypto schemes, promising high returns to lure victims into transferring funds.

Pressuring for quick decisions

• They insist on immediate action, pressuring victims to send money quickly without thorough consideration.

Isolating the victim

• Scammers may advise victims to keep their relationship or financial dealings private, preventing them from seeking input from friends or family.

Exploiting personal information

• They might ask for personal details under the promise of deepening the relationship. They will also use this information for identity theft or further fraud.

Identifying red flags in online relationships

To make sure that you don’t fall for these scams, it’s important to identify red flags in online relationships. Be cautious if you notice the following warning signs:

1. Quick declarations of love: If someone you met online professes love or deep affection unusually fast, it may be a sign of manipulative intentions.
2. Reluctance to meet in person: Consistent excuses to avoid video calls or in-person meetings can be a red flag.
3. Requests for financial help: Be wary if the person asks for money due to emergencies, medical expenses, or investment opportunities, especially involving cryptocurrencies.
4. Inconsistent personal information: Look for inconsistencies in their personal details or stories, which may suggest dishonesty.
5. Overly flawless profiles: Profiles that seem exceptionally perfect or without even a minor flaw might be fabricated to lure victims.
6. Urgency and pressure: Scammers often create a sense of urgency, pressuring you to make quick decisions without ample time to think.
7. Isolation attempts: If they urge you to keep the relationship private or discourage you from discussing it with friends or family, it could be a tactic.
8. Unverifiable personal details: If you cannot verify their personal information or they have a minimal online footprint, it may indicate a fake identity.

Real-life case studies of victims

Case study 1: Woman loses life savings ($450,000)

Thirty-seven-year-old Shreya Datta fell for a crypto romance scam where she lost her savings and retirement funds worth $450,000. Datta was a director at a multinational tech firm in Philadelphia and described the scammer as a wine trader from France who initially appeared charming.

The scammer was involved in a months-long relationship where he built her trust. They met on the dating app Hinge but soon moved to WhatsApp. Datta mentioned that the scammer had pinpointed crypto market monitoring as one of his hobbies.

The crypto romance scammer made her invest $1,000 and quickly turned it into $1,250. Initially, she was also not having any problems withdrawing funds. He then helped Datta grow her $6,000 crypto investment into $9,000.

Over time, she had invested over $450,000 in the fake app, and the profit was showing double. However, when she tried to withdraw the money, she was asked to pay a 10% personal tax. She filed reports with the police and the FBI, but the chances of her recovering any of her money are near impossible.

Case study 2: The $5m crypto romance scam

In August 2024, the FBI investigated a crypto romance scam that defrauded 71 victims of approximately $5m. Scammers created fake profiles on social media and dating platforms, luring individuals into fraudulent crypto investments through a platform called Bitkanant.

Interestingly, the US Department of Justice highlighted in their press release that the seized funds were traced to crypto addresses allegedly associated with the laundering of criminally derived proceeds from crypto investment scams.

As per the details from the court filing, scammers approached the victims by showing interest in a romantic relationship. They also show fabricated investment portfolios on their fake platforms to lure the victims to invest more.

Victims, including a 60-year-old from North Carolina and an 83-year-old from Minnesota, believed they were making legitimate investments. When the victims tried to withdraw the money, they were asked to pay a tax or penalties.

Case study 3: The $8m pig-butchering scam

A woman named Divya Gadasalli was lured into investing over $8m in fraudulent cryptocurrency platforms. The pig-butchering scam involved fake websites and consistent communication to build credibility.

Gadasalli told Bloomberg that she received $8m following her father’s murder. She met the scammer named Jerry Bulase on Tinder. During their conversation, Bulasa often boasted how he was making a lot of profit from crypto investments. Gadasalli was also going through a situation where she wanted to become financially independent. Starting with $10,000 investment, she started investing more funds, where she was also able to withdraw approximately $30,000 a month.

Gadasalli then invested $3m in USDT into a wallet linked to a brokerage called Digital Fund, which was followed by a $6m investment. However, this time she was unable to withdraw the funds.

Case study 4: The Australian scam center raid

In October 2024, Australian Federal Police and Philippine authorities raided a scam center in Manila. They also arrested 250 individuals involved in romance and crypto scams targeting Australian men over 35.

The scammers operated in shifts aligned with Australian time zones, building trust with victims before convincing them to invest in fraudulent cryptocurrency platforms.  The authorities also discovered over 1,000 mobile phones and SIM cards.

The impact of scams on victims

Crypto romance scams affect victims on financial, emotional, psychological, and social levels and could have several consequences.

Financial impact

• Monetary losses: Many victims incur heavy financial losses, sometimes including their entire life savings, through fraudulent cryptocurrency investments or direct transfers to scammers.
• Low recovery rates: The recovery of lost funds is particularly challenging due to the decentralized and anonymous nature of cryptocurrencies. This makes tracing and retrieving the stolen assets nearly impossible.

Emotional and psychological impact

• Feelings of betrayal and shame: Victims often go through deep emotional pain upon realizing that their relationship, which they perceived as genuine, was a scam. This realization can lead to feelings of betrayal, embarrassment, and self-blame.
• Mental-health challenges: The scam’s aftermath may trigger anxiety, depression, and trust issues. It can also affect the victims’ mental health and their ability to form new relationships.

Social impact

• Isolation from support networks: Scammers generally manipulate victims into keeping the relationship a secret. This isolation can prevent friends and family from providing necessary support and recognizing the signs of a scam.
• Stigma and reluctance to seek help: The embarrassment associated with being scammed often prevents victims from seeking help or reporting the crime. It hinders their recovery and also allows scammers to operate without repercussions.

Legal and criminal implications

• Involvement in illegal activities: Some victims even find themselves involved in illegal activities such as money laundering. These actions can have serious legal consequences, adding to the victim’s distress.
• Challenges in law enforcement: The global nature of these scams, with scammers operating across different countries, makes it difficult to take legal action and prosecute the offenders.

How to protect yourself from crypto romance scams

Protecting yourself from crypto romance scams includes awareness and steps to safeguard your personal and financial information. Here are essential tips to help you avoid falling victim to these deceptive tactics:

Verify identities thoroughly

• Research your contact: Use online search tools and social media to verify the identity of anyone you meet online. Be wary of profiles that seem too good to be true or lack a substantial online presence.
• Seek proof: Ask for video calls and other forms of verification to ensure the person is who they claim to be. This should be done, especially if they resist showing their face or often cancel video meetings.

Guard your personal information

• Limit sharing: Do not share personal details such as your address, financial status, or family information with someone you have not met in person.
• Secure your accounts: Use strong, unique passwords for your online accounts and enable two-factor authentication to improve security.

Be cautious with financial transactions

• Never send money or crypto: Avoid transferring money or cryptocurrency to someone you’ve met online, especially if you have never met them in person.
• Recognize scam patterns: Be alert to requests for financial help or investment opportunities that arise early in an online relationship or seem urgent.

Educate yourself about common scam tactics

• Stay informed: Learn about the most common tactics used by romance scammers. These include professing love quickly, creating emergencies that require money, and posing as a trusted professional.
• Use trusted resources: Consult websites and resources from reputable financial and security organizations for up-to-date information on how to recognize and prevent scams.

Consult friends and family

• Seek second opinions: Discuss your online interactions with trusted friends or family members. They may offer a more objective perspective on your online relationship.
• Listen to concerns: Be open to concerns from people close to you, as they might notice warning signs that you have overlooked.

Reporting and seeking help

If you suspect you’re a victim of a crypto romance scam, acting quickly is important to minimize further damage. Here are steps on how to report the incident and find necessary assistance:

Cease all communication

• Immediately end all communication with the suspected scammer to avoid further manipulation or financial requests.

Gather evidence

• Keep all forms of communication, including texts, emails, transaction details, and any photos or documents exchanged. This documentation is crucial for any investigation.

Report to authorities

• File a report with your local police. Provide them with all evidence to aid their investigation.
• In many countries, there are specific portals for reporting cybercrimes.

Notify financial institutions

• Alert your bank or any financial institution involved to possibly halt or reverse fraudulent transactions.
• If you sent money through a crypto exchange, report the fraud to their support team immediately. They may be able to help by freezing the assets.

Report to online platforms

• Report the scammer’s profile on any platforms where you interacted. This helps in disabling the scammer’s account and prevents them from scamming others.

Seek support

• The emotional impact of being scammed can be profound. Professional counseling or therapy can help you cope with the psychological stress.
• Organizations like the Society of Citizens Against Relationship Scams (SCARS – againstscams.org) offer support and resources for scam victims, providing a community that understands and assists with recovery.

Legal consequences for scammers

Crypto romance scammers can face serious legal repercussions depending on the jurisdiction and nature of the crimes.

Fraud charges

• Fraud involves purposeful deception to secure unfair or unlawful gain.
• Those found guilty of fraud can face fines, orders to pay restitution, and imprisonment. For instance, in the United States, a conviction for wire fraud can lead to up to 20 years in prison for each offense.

Money-laundering

• Money-laundering involves disguising the origins of illegally obtained money, often through complex financial channels.
• Convictions may result in fines and extensive prison terms. A notable case in 2024 involved Heather Morgan, who received an 18-month prison sentence for helping launder BTC stolen from the Bitfinex exchange.

Identity theft

• This crime occurs when someone illegally uses another person’s personal information to commit fraud.
• Identity theft can result in various penalties, including fines and prison time, depending on the severity and jurisdiction.

Cybercrime offenses

• These are crimes carried out via the internet or other digital means, including unauthorized access to computer systems.
• Offenders can face fines and imprisonment.

International legal actions

• Countries may extradite individuals to face charges in the nation where their crimes were committed. For example, in March 2023, Irina Dilkinska was extradited from Bulgaria to the US due to her involvement in the OneCoin scam.
• International agencies often work together to catch and prosecute scammers operating across borders.

Asset seizure and restitution

• Authorities are empowered to seize assets derived from illegal activities.
• Courts may order criminals to pay victims back for their financial losses.

Resources for education and awareness

Gaining knowledge about crypto romance scams is key to prevention. Here’s a list of reliable resources that provide information and support:

Government agencies

• Federal Trade Commission (FTC): Offers extensive guides on recognizing and avoiding romance scams. They also detail common scammer tactics and protective measures.
• Federal Bureau of Investigation (FBI): Publishes announcements and advice on spotting and reporting crypto romance scams.

Non-profit organizations

• AARP Fraud Watch Network: Focuses on scam prevention for older adults through articles and webinars on various fraud types, including crypto romance scams.
• Society of Citizens Against Relationship Scams (SCARS): Provides education and support for romance scam victims, with resources on understanding scammer behaviors and recovering from scams.

Financial regulatory bodies

• Commodity Futures Trading Commission (CFTC): Issues warnings about financial romance frauds, offering tips on recognizing scams and taking preventive actions.
• Financial Industry Regulatory Authority (FINRA): Shares insights on the nexus of romance scams and cryptocurrency through articles and podcasts.

Support groups and forums

• Reddit communities: Places like r/CryptoScams, r/Scams, and r/Relationships provide a platform for users to discuss personal experiences and strategies for avoiding scams.
• Online support groups: Websites such as Scam Survivors offer forums where victims can connect, share their stories, and find communal support.

Challenges in detection and prevention

The ease of creating new accounts on social media allows scammers to quickly return even after being reported or banned. Some platforms offer encrypted messaging, which makes it harder for authorities to monitor or intervene in fraudulent activities.

Final thoughts

If it seems too good to be true, it probably is. Be ruthless about who you let into your life and never give your money to anyone. People are very convincing – question everything and triple-check all information before committing to any investment, or indeed, any relationship.

1. 01.

   How do romance scams work?

   

   Romance scams happen when scammers create fake online identities to build relationships with unsuspecting individuals. They use attractive photos and made-up details to seem real.

   Once trust is gained, they ask for money or personal information by sharing false stories, such as emergencies or investment opportunities. These scams are common on dating sites, social media, and messaging apps.

2. 02.

   How to spot a fake online profile?

   

   You can spot fake profiles by watching for these signs:

   • Inconsistent information: Their stories or personal details don’t match.
   • Limited content: Their profile has few photos or posts, making it hard to verify their identity.
   • Fast intimacy: They quickly push for a deep connection or ask to move conversations off the platform.
   • Avoiding calls or meetings: They refuse video calls or in-person meetings without a good reason.
   • Requests for money: They ask for financial help or sensitive details, which is a major red flag.