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Following an FBI investigation, the US Department of Justice has seized roughly US$112 million in cryptocurrency gained from pig-butchering scams.
The money was tricked out of numerous victims and moved through several accounts before finally ending up in a Binance account listed in a warrant filed with the US District Court of California. The warrant was just one of many authorised by judges in California, Arizona, and Idaho.
Pig-butchering is an evolution of online romance scams, focusing on fake cryptocurrency investment schemes. The perpetrators refer to their victims as “pigs” due to the process of “fattening them up” by getting them to transfer more and more money into the fake schemes.
A copy of a heavily redacted version of the 52-page California warrant is being hosted by The Register, lists the threat actor’s strategies for hooking victims and even goes into detail about some of the cases. The document reveals the FBI’s investigations and lays out the basics of both cryptocurrency and online scams as supporting evidence.
“The investment schemes have the appearance of a legitimate enterprise through the use of fabricated interfaces, derivative websites that appear related to legitimate companies, and other techniques designed to bolster the scheme’s legitimacy,” the warrant read.
“This generally includes a fake investment platform operated through a website or mobile application that displays a fictitious investment portfolio with abnormally large investment returns.”
The people making contact with the victims did so via a number of social media platforms, sometimes faking an accidental message, other times being approached more directly. In many cases, the scammer suggested taking the conversation to another service once contact was established.
The scammers would then bring up cryptocurrency investment schemes with high returns and convince their victims to invest, providing fake screenshots of their own successful investments.
Once hooked, the scammers would use a range of excuses to get their victims to transfer more money. There might be fees to be paid before withdrawals can be processed or fees to get “VIP access” to trading accounts. No matter the details, the scammers keep up the pretence of investing their victims’ money as long as they can.
In one case, a retiree lost about US$2.36 million in the process, including money from their retirement funds.
In the Californian warrant alone, “the FBI Phoenix Division has identified at least 69 victims with an estimated loss of at least $33.9 million related to these various fraudulent investment platforms”.
Kenneth Polite, Jr., Assistant US Attorney-General, is hopeful the victims can get their money back.
“Now that we have seized this virtual currency, we will seek to swiftly return it to victims,” Polite said in a statement.
David Hollingworth has been writing about technology for over 20 years, and has worked for a range of print and online titles in his career. He is enjoying getting to grips with cyber security, especially when it lets him talk about Lego.
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