When the Bitcoin Scammers Came for Me - The Atlantic

The Pig-Butchering Scam: Crypto Criminals and Social Media

The rise of crypto, the $2 trillion speculative asset class and its associated money transfer infrastructure, has led to a surge in the pig-butchering scam. This type of scam is characterized by slowing down the burn; offering to help folks invest, rather than asking them for cash outright. And social media has given them absurd scale and reach. The single biggest factor behind the rise of the pig-butchering scam is the rise of crypto, the $2 trillion speculative asset class and its associated money transfer infrastructure.

Bitcoin and similar cryptocurrencies are not exactly untraceable and anonymous. But the crypto markets are scantly regulated; many firms either operate overseas or flout the constraints of domestic law. Don't take it from me. Take it from the chief compliance officer of the mega-exchange Binance, as quoted by litigators at the Securities and Exchange Commission: "We are operating as a fking unlicensed securities exchange in the USA bro." Once purchased, cryptocurrencies can be sent to anyone, anywhere, and are usually impossible to recover.

You could go into Wells Fargo and say, "Hey, I need to send $200,000 to this bank account," Griffin told me. Wells Fargo would run the transaction through its anti-money-laundering procedures. If it were a bank account in Thailand or Myanmar, that would probably throw up some flags for suspicious activity. They might block that wire or ask you a lot of questions. Yet moving money from Wells Fargo to Coinbase to buy bitcoin would not raise such alarms. And at that point, you're just one transaction away from losing your funds.

You might assume that the person talking you out of your funds is some Malta-based hacker or terrifying, bitcoin-obsessed teen. In fact, the person is likely a victim themselves. I had no way of tracing the source of the scheme targeting me. But the United Nations has warned that many of these pig-butchers are forced into the practice by gangs. They are kidnapped and held in labor camps in Southeast Asia.

Since the onset of the pandemic, criminal groups have been placing false job advertisements on chat apps and elsewhere, luring in multilingual, computer-literate workers, and then ordering them to seduce and swindle foreigners, text by text. Hundreds of thousands of people from across the region and beyond have been forcibly engaged in online criminality, according to a report by the UN Office of the High Commissioner for Human Rights.

The pig butchering has to stop, for the millions of victims being swindled and for the hundreds of thousands of victims being coerced into swindling them. Crypto companies must be made to act like other financial companies, complying with basic know-your-customer regulatory rules and collecting tax data for the authorities. Treating the problem as one of large-scale money laundering, not as many person-to-person schemes, might be the best way to protect consumers. In the meantime, publicizing these thieves' sweet, slow, chatty methods should help, if only on the margin. Nobody should be fooled. If you really want to invest in bitcoin, you're better off doing it alone.