Crypto-versed cybercriminals are increasingly turning to pig-butchering over longer-burn “Ponzi schemes” as law enforcement has become better at taking down scammers.
In the second part of its crypto crime mid-year update, published on Aug. 29, blockchain security and compliance firm Chainalysis reported that pig butchering scams are on the rise in 2024.
It noted that crypto scammers are adapting their tactics, both onchain, and offchain, to conduct more devastating scams of shorter duration.
The average lifespan of crypto scams has decreased significantly, from 271 days for scams beginning in 2020 to 42 days for those starting in 2024.
The average lifespan of scams is decreasing. Source: Chainalysis
Speaking to Cointelegraph, Eric Jardine, cybercrimes research lead at Chainalysis, said the decline in scam lifespan is a testament to the effectiveness of law enforcement efforts.
“These interventions have forced scammers into more rapidly turning over their infrastructure, making them harder to track on-chain. Still, harder to track and shutdown does not mean impossible and the record of law enforcement interventions and asset recovery is encouraging.”
Additionally, 43% of year-to-date scam inflows have gone to wallets that became active in 2024, suggesting a surge in new scams, many of which are pig butchering. The report noted:
“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,”
Pig butchering is a technique whereby the scammer builds an online relationship with the victim, who is “fattened up” before being lured into investing in a fraudulent crypto project that eventually results in a rug pull or other financial loss.
Chainalysis stated that the pivot has been driven in part by increasing enforcement efforts and stablecoin issuers blacklisting scam addresses.
It revealed that one of the largest scam wallets active in 2024 is associated with Myanmar’s KK Park, a notorious pig butchering compound that has netted over $100 million so far this year.
Additionally, scammers are purchasing seasoned social media profiles from platforms such as Facebook, Tinder, and Match.com from China-based services for use in their pig butchering campaigns.
Monthly inflows to illicit services selling social media profiles. Source: Chainalysis
Illicit services selling social media accounts have seen a steady increase in crypto flows totaling more than $10 million over the past two years and as many as two million social media profiles may have been purchased by scammers for targeting victims, it noted.
Regarding the demographics of these scams, Jardine noted that interpersonal scams leverage a relationship between the scammer and the victim, adding:
“Those who are most likely to form these relationships in the first place would be potentially most susceptible. This might include the elderly, people at transitional phases of life, and those who are seeking friendship or romance online.”
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One such illicit marketplace is Huione Guarantee, which has processed more than $49 billion in cryptocurrency transactions since 2021.
The platform facilitates various illicit activities, including pig butchering, investment fraud, and money laundering, and connects buyers and sellers on messaging platforms such as Telegram.
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