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CFTC New Joint Crackdown Targets Crypto ‘Pig Butchering’ Scams

Home CFTC New Joint Crackdown Targets Crypto ‘Pig Butchering’ Scams
By: Antonio Smith / September 13, 2024

CFTC New Joint Crackdown Targets Crypto ‘Pig Butchering’ Scams

    • Fighting an increasing menace in bitcoin fraud known as “pig butchering,” the Commodity Futures Trading Commission has declared a coordinated effort with other federal and commercial organizations.

    • By doing this, the agency will work with several federal and private groups —not just the US Securities and Exchange Commission and the Financial Industry Regulatory Authority—for better awareness and education of the public about such frauds.
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    • In response to these scams, the Office of Customer Outreach and Education is partnering with organizations such as the American Bankers Association Foundation, the Federal Bureau of Investigation and the Department of Homeland Security to distribute information materials to consumers that raise “red flags” that may help consumers identify and avoid these scams.
    • Recently, “pig butchering” scams were reported to be the highest-return fraud involving cryptocurrency, leaving victims with staggering losses.
    • Source: CFTC
    • What Are ‘Pig Butchering’ Scams?
    • Typically, these types of schemes include con artists luring victims into a state of trust—most frequently through the use of dating apps or social media—and then persuading them to fund fictitious cryptocurrency-based ventures. The CFTC’s campaign aims to prevent fraud before it occurs by educating potential victims about the tactics used by scammers.
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    • Partnerships And Educational Materials
    • The CFTC campaign also involves an infographic illustrating the stages involved–from how a victim would be targeted to the final result of losing money. This will be used to identify red flags and give tips on where to report suspicious messages.
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    • The CFTC also is partnering with the SEC’s Office of Investor Education and Advocacy, FINRA, and the North American Securities Administrators Association in developing and disseminating an investor alert to clearly demonstrate how “pig butchering” fraudsters operate.
    • Total crypto market cap currently at $1.9 trillion. Chart: TradingView
    • Reporting Mechanism And Goals
    • The website Onlinescamreport.com also urges victims to report the scams to authorities and gives them, step by step, instructions on how to document and report fraudulent activities. The CFTC campaign focuses on the targets of those who would least expect falling prey to scams and underscores a message that even knowledgeable investors may be targeted.

 

  • This coordinated action by the CFTC marks a significant stride toward mitigating the growing concern about frauds connected with cryptocurrency. Alliances shall be utilized to help make the mission accomplish its goal: empowering the people to defend against frauds, which have recently become complex.

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