Scammers ditch ‘elaborate’ crypto Ponzis for pig butchering: Chainalysis
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.
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.
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:
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.
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:
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.