Amidst the rise in online fraud, understanding the Pig Butchering Scam is essential. The name comes from the idea of fattening a pig before slaughter. A pig butchering scam is a deceitful scheme where people are convinced to invest more money, often in cryptocurrency, into what seems like a genuine opportunity. These scams are widespread and lead to big financial losses for victims worldwide, as the scammers disappear after collecting large sums of money.
The ‘pig butchering’ exploits the crypto space’s value ambiguity, favouring investors anticipating very high returns. Scammers often play on the feelings of people, getting them involved in transactions to receive financial returns, such as investing in fake platforms.
“Promising hefty returns, it lures investors with elaborate schemes. Behind the façade lies a Ponzi scheme, enriching early investors with funds from new ones. Investors must scrutinise projects and research teams and demand transparency. Regulatory bodies must strengthen oversight to protect investors. The Pig Butchering Scam serves as a stark reminder: in crypto, scepticism is key to avoiding financial ruin,” said Vinshu Gupta, Partner, NonceBlox.
“Given the gravity of the situation, as we approach 2024, the government’s steps in regulating cryptocurrencies and taxing them create a grand chance to integrate a rigorous crackdown on mischievous pig-cashing and other frauds involving cryptocurrencies. Comprehensive KYC standards, advanced due diligence procedures, and joint efforts of regulatory agencies and industry stakeholders are the cornerstones of prevention of any temporary anomalies in this digital assets system,” said Ashish Aggarwal, Director of Acube Ventures.
How Pig Butchering Scam carried out?
-It all begins with the “host” contacting people online through social media, dating apps, or deceptive messages.
-Once they’ve found a target, known as the “pig,” the host establishes a false sense of friendship and encourages them to explore cryptocurrency trading.
-Using a fraudulent trading app, the host deceives the victim into believing they’re making profits from fabricated trades.
-Gradually, as the victim’s trust grows, the host persuades them to invest more money, a tactic referred to as “fattening the pig” before the scam is revealed.
-When victims attempt to withdraw their funds, the fake platform either makes excuses or imposes substantial fees, ultimately exposing the scam. Retrieving lost funds is exceedingly difficult due to the nature of blockchain transactions.
Nithin Kamath on Pig Butchering Scam
Nithin Kamath, co-founder and Chief Executive Officer (CEO) of online brokerage firm Zerodha had flagged a new wave of fraudulent phishing websites that mimic Indian brokerages to dupe investors.
“After the Chinese loan apps scam, the latest scam from actors in China and other Asian countries is phishing websites. Fraudsters are creating hundreds of websites and trading apps that look similar to the websites of Indian brokers. Unwitting users who click on the app download links, etc., will be prompted to download the fake app. The goal is to get people to transfer money by taking advantage of their familiarity with these apps.
This is just another one of the hundreds of international scams that have exploded in the last few years. In this case, a few tips I shared earlier to protect yourself from scams also apply,” Kamath posted on social media platform ‘X’ (formerly Twitter) on February 17.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 15 Mar 2024, 02:40 PM IST