• The US Department of Justice has seized up to $112 million in digital currency from addresses tied to pig butchering scams.
• Victims were tricked into investing much of their savings into phony digital schemes.
• Pig butchering scams typically start with illicit actors reaching out to potential victims on WhatsApp or similar platforms.

Origins of Scam

Pig butchering scams first originated in the region of Florida back in September 2020, when Chief Financial Officer Jimmy Patronis warned consumers to “stay on guard for scams, especially as new financial products like bitcoin and other cryptocurrencies become increasingly popular”. Since then, reports have suggested that cryptocurrency-related scams have bilked millions out of unsuspecting crypto investors, many of whom were scammed through online dating apps over the course of several months.

Judicial Action

In response to this scamming problem, judges in Arizona, Idaho, and California issued at least six separate warrants for the seizure of digital currency housed in various addresses. Court documents explain that the FBI Phoenix Division identified 69 victims who suffered an estimated loss of at least $33.9 million due to these fraudulent investment platforms.

Victimization Process

The process begins with malicious actors persuading potential victims into getting involved in online digital currency trading platforms – which are actually controlled by “friends” of the scammers – and investing their savings therein. Initially, victims may see some profits before trying to make a withdrawal; however, they are usually told they need to pay additional fees or invest more before they can take any money out. Eventually most victims are completely locked out of their accounts and lose all funds invested.

Justice Seizure

The U.S Department Justice (DOJ) has seized as much as $112 million in digital currency from these fraudulent addresses as part of an effort to return funds back to those victimized by such schemes. Although it is unclear what will happen next for these individuals who have been scammed, it is clear that justice is being served and some restitution may be possible for those affected by such crimes.

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