Pig butchering scams drained over $5.5 billion from crypto traders in 2024, in accordance with a report by blockchain safety agency Cyvers. The report revealed that these scams focused 200,000 victims final 12 months.
This kind of fraud has now grow to be one of many greatest threats to crypto traders and platforms, with losses far exceeding these from conventional hacking assaults.
What Are Pig Butchering Scams?
Pig butchering scams are a sort of on-line fraud the place scammers trick victims into willingly sending their crypto property. As a substitute of stealing funds outright, scammers construct belief over time, convincing victims to put money into pretend alternatives.
The time period “pig butchering” refers to how fraudsters “fatten up” their victims with guarantees of excessive returns earlier than stealing their cash. These scams usually mix parts of Ponzi schemes, romance scams, and faux funding alternatives.
Not like hacks, the place funds are stolen instantly, pig butchering scams contain social engineering. Victims imagine they’re making a reliable funding till they notice their cash is gone.
Ethereum Community Hit Hardest
The report discovered that the Ethereum community noticed essentially the most injury, with pig butchering scams costing traders over $5.5 billion in crypto. Among the many ten most affected platforms, three of the 5 largest centralized exchanges (CEXs), a crypto-friendly financial institution, and an institutional buying and selling platform suffered heavy losses.
As compared, hacking assaults in 2024 precipitated $2.3 billion in losses throughout 165 incidents, a 40% improve from 2023, when hackers stole $1.69 billion. Regardless of this rise, pig butchering scams stay the most important monetary menace.
Scammers Goal Victims Over Weeks or Months
Probably the most harmful facets of pig butchering scams is the grooming course of. Not like fast hacks, scammers spend weeks and even months gaining victims’ belief earlier than stealing their funds.
Based on Cyvers, 35% of scams contain a grooming interval of 1 to 2 weeks, whereas 10% final up to 3 months. Throughout this time, scammers use pretend social media profiles, chatbots, and AI-generated conversations to construct relationships with victims.
As soon as belief is established, victims are inspired to make massive deposits, believing they may earn excessive returns. However once they attempt to withdraw their cash, they notice they’ve been scammed.
Who Are the Most Affected Victims Pig Butchering Rip-off?
The report revealed that males between the ages of 30 and 49 are the most typical victims of pig butchering scams.
Worryingly, 75% of victims misplaced greater than half of their internet price. Many individuals who fall for these scams are skilled traders who imagine they’re making a wise monetary choice.
Pig butchering scams don’t simply damage particular person traders. Additionally they injury the status of crypto exchanges and platforms.
Deddy Lavid, co-founder and CEO of Cyvers, warned that main exchanges are shedding tens of millions of {dollars} on account of these scams. Many platforms are struggling to keep up banking relationships and are going through elevated regulatory scrutiny.
Governments and crypto firms are working to battle again. Authorities are imposing stricter rules, whereas business gamers are growing new safety measures to forestall scams.
Document-Breaking Losses in December 2024
December 2024 was the worst month for pig butchering scams, with over $468 million stolen. This was even greater than November, which noticed $424 million in losses.
