Intro: So-called “pig butchering” is when a scammer builds up trust with their victims before eventually pressuring them to deposit more and more of their crypto assets into bogus digital wallets or websites controlled by the scammer.
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INNOVATION DAILY COVER
How One Man Lost $1 Million To A Crypto ‘Super Scam’ Called Pig Butchering
A 271,000-word WhatsApp conversation between a Bay Area man and his scammer reveals the heartbreaking mechanics of a new breed of investment racket. Experts believe the global losses are in the billions
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The message to Cy's WhatsApp came out of the blue.
“Jessica" told him she'd found his number in her phone contacts and was reaching out because she thought they might be old colleagues. Cy, a 52-year-old man who lives in the Bay Area, didn't remember her, but she was kind, cordial and engaging. She sent pictures of what she was eating. They discussed their mutual love of sushi, and Cy enjoyed the conversation enough to follow up with her the next day.
Soon, the text exchanges moved from the anodyne to the personal. Cy told Jessica about his struggles to support his family, about his ailing father and how the decision to send his father to hospice care weighed on him.
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That was October 2021. By December, Cy had been conned out of more than $1 million dollars — over a quarter of it, borrowed money. His finances were in ruins. Cy, who asked Forbes to identify him by that pseudonym, had been “pig butchered.”
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Pig butchering is a relatively new long-game financial con in which “pigs,” or targets, are “butchered” by people who convince them to invest ever-larger sums in purported cryptocurrency-fueled trading platforms. The fake platforms are designed to look real, and make the victims believe that their investments are making fantastic returns — until their scammer, and all the money they believe they’ve invested, disappears.
Victims often lose significant sums, and the practice is so lucrative that it’s being scaled up and carried out en masse in countries like Cambodia, Laos and Myanmar. So far, American law enforcement officials at both the federal and local level have made little headway in recovering stolen funds or catching the perpetrators.
These scams are carried out “on a large scale, on an industrial scale — like they’re doing fraud in a factory.”
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Complicating law enforcement efforts is the issue of human trafficking. Human rights advocates say many of the scammers are victims themselves, people lured to countries across southeast Asia by the prospect of a better-paying job and then forced to run pig butchering scams, sometimes at the threat of violence. Often, their passports and cellphones are seized upon arrival.
These scams are carried out “on a large scale, on an industrial scale — like they’re doing fraud in a factory,” Jan Santiago, the deputy director of advocacy group Global Anti-Scam Organization, told Forbes. He estimates that the global losses are in the billions.
Cy lost more than $1 million dollars to such a scam. The manipulation played out via a months-long, heartbreaking WhatsApp conversation that runs more 271,000 words — 480 single-spaced pages..."
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UPDATE: Statistics of people who fell for the Pig-Butchering Scam (ShaZhuPan)
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Even this is likely to be an undercount, because we know of many who were victimized in 2020 and 2021 that did not know how or were too embarrassed/traumatized to report their losses. These individuals were typically recent Chinese immigrants who did not speak English well.
This matches the reported statistics in China, where 69% of Pig-Butchering scam victims were women, with ages concentrated between 25 and 40 years old. http://www.xinghuozhiku.com/59618.html
Why otherwise highly educated, working professionals are either the most targeted or fall victim the most will be subject of a future post.
In addition to the above updates, here are new insights into the psychological aspects of the scam:
Anecdotally, we know of a couple of victims outside of China who did follow through, but whose stories we cannot share, since their families have asked for privacy. There have been dozens of reported suicides from ShaZhuPan victims in China.
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