CFTC Partners with Agencies to Combat Crypto Pig Butchering Scams

Highlights:

• CFTC partners with federal and private agencies to fight pig butchering scams.
• The new infographic highlights scam tactics and offers protection tips for consumers.
• The rise in crypto scams costing billions prompts increased multi-agency fraud prevention efforts.

According to a Sept. 11 press release, the United States Commodity Futures Trading Commission (CFTC) has teamed up with federal and private organizations to combat the surge in crypto scams known as “pig butchering. ” The agency reports that these scams have resulted in billions in losses due to lack of awareness. Their campaign focuses on preventing fraud by equipping consumers with the knowledge to spot warning signs and steer clear of such schemes.

CFTC Discloses Partnership Against Crypto Pig Butchering

Under the partnership, the CFTC’s Office of Customer Outreach and Education (OCEO) will work with the American Bankers Association Foundation, a private regulator, and federal agencies such as the SEC and FINRA to raise awareness about these scams through educational materials.

To increase awareness, the CFTC’s OCEO released a one-page infographic explaining how these scams operate and providing tips on how to avoid them. It outlines how scammers target individuals, build trust, and steal money, urging people to avoid interacting with unfamiliar contacts online. It also highlights warning signs and guides those who may have been impacted.

The CFTC explained:

“It targets individuals who think they would never fall for this type of scam by giving them an introspective on how these fraudsters have perfected their criminal craft to entice even the savviest investors.” 

The OCEO and its partners also issued an investor alert detailing how scammers build trust and manipulate victims through unsolicited messages. The alert advises consumers to avoid engaging with suspicious communications and to report them to the authorities.

Crypto #investment or “relationship” scams are on the rise and @CFTC is releasing a prevention brochure in partnership with @ABABankers, @FBI, @FinCENnews, @FINRA, @HSI_HQ, @IRSnews, @SecretService, and @SEC_Investor_Ed. Learn more: https://t.co/Rc10CxD6An pic.twitter.com/W3SWNieJs3

— CFTC (@CFTC) September 11, 2024

Melanie Devoe, OCEO director, stressed the importance of preventing scams by avoiding responses to suspicious messages. A slew of federal agencies will also share the infographic, including the SEC’s Office of Investor Education and Advocacy, FINRA, the Department of Homeland Security, the Secret Service, along with the FBI and IRS. 

Devoe said:

“Partnering with federal and state regulators as well as consumer protection groups and other organizations helps spread the CFTC’s customer education message and hopefully reaches people before they can get scammed.”

Surge in Crypto Scams

This new initiative follows the July partnership between the CFTC and the Justice Department’s computer crime team, which held the first conference to tackle pig butchering scams. On September 9, the FBI revealed that Americans lost $5.6 billion to cryptocurrency fraud in 2023, a 45% rise from 2022, with over $215 million tied to romance scams.

Americans lost $5.6 billion in crypto scams in 2023—and accounted for 50% of total losses from financial fraud—according to a new report published Monday by the FBIhttps://t.co/m1XwafLjCE pic.twitter.com/wDFD9gv9li

— Leo Schwartz (@leomschwartz) September 9, 2024

Moreover, the latest Chainalysis 2024 Crypto Crime Report reveals that “pig butchering” scams are now the most lucrative type of crypto scam, with victims losing billions this year. The report shows that many scam funds in 2024 went to new wallets, indicating more recent scams. Scams are also getting quicker, lasting only 42 days on average this year, compared to 271 days in 2020.

The Federal Trade Commission has recently issued a warning about scammers’ rising misuse of crypto ATMs. These scams often involve fraudsters impersonating customer service representatives, claiming identity theft or account breaches. Victims are then instructed to deposit funds into a crypto ATM using a QR code linked to the scammer’s wallet.