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Crypto fraudsters are abandoning complicated Ponzi schemes in favor of “pig butchering” scams, which have seen a marked uptick in 2024, according to blockchain analytics firm Chainalysis. These schemes often combine romance scams and investment fraud to persuade victims to provide ever larger sums of crypto to scammers over a sustained time period.

Fraudsters often view their victims as “pigs” to “fatten up” through romantic overtures, typically via dating apps or social media interactions. The ultimate aim is to “butcher” – or swindle – victims out of a significant level of money. The scams have gained popularity in China and Southeast Asia, and in recent years have been increasingly found across America.

Last year, the government recorded $4.57 billion in losses from investment fraud, but this figure is likely an underestimate. Many victims are directed to fake investment platforms where they unwittingly divulge sensitive information, making fund tracing and recovery increasingly challenging. When fraudsters gain access to a victim’s funds, they often abscond after a series of escalating payments.

“Many victims have assumed massive debt to cover losses from these fraudulent investments,” the FBI said about the rise of these scams.

“Crypto-investment scams saw unprecedented increases in the number of victims and the dollar losses to these investors,” the FBI added.

"This macro trend is consistent with the continued pivot of scammers from elaborate ponzi schemes that cast a wide net to more targeted campaigns like pig butchering or address poisoning, driven in part by increasing enforcement efforts and stablecoin issuers blacklisting scam addresses," Chainalysis said.