FinCEN Alert: Virtual Currency ‘Pig Butchering’ Investment Scam

The Financial Crimes Enforcement Network (FinCEN) has issued an alert to highlight a prominent virtual currency investment scam known as “pig butchering.”  Multiple U.S. law enforcement sources estimate victims in the United States have lost billions of dollars to these scams and other virtual currency investment frauds.

“This scam has impacted far too many Americans, which is why FinCEN is sounding the alarm and asking financial institutions to report suspicious activity indicative of this scheme,” said Acting Director Himamauli Das. “Suspicious Activity Reports filed by financial institutions will enable law enforcement to both aid victims and track down the perpetrators.”

“Pig butchering” scams resemble the practice of fattening a hog before slaughter.  Victims invest in supposedly legitimate virtual currency investment opportunities before they are conned out of their money.  Scammers refer to victims as “pigs,” and may leverage fictitious identities, the guise of potential relationships, and elaborate storylines to “fatten up” the victim into believing they are in trusted partnerships before they defraud the victims of their assets — the “butchering.”

These scams are largely perpetrated by criminal enterprises based in Southeast Asia who use victims of labor trafficking to conduct outreach to millions of unsuspecting individuals around the world.

FinCEN’s alert explains the scam’s methodology; provides behavioral, financial, and technical red flags to help financial institutions identify and report related suspicious activity; and reminds financial institutions of their reporting requirements under the Bank Secrecy Act.

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