The Commodity Futures Trading Commission (CFTC) has joined forces with federal and private organizations to combat the wave of crypto scams known as “pig slaughter,” according to a September 11 press release.
According to the agency, these scams have resulted in billions in losses due to a lack of awareness and understanding. The regulator’s campaign aims to prevent fraud before it happens, by providing consumers with the information they need to spot the warning signs and avoid falling prey to these schemes.
Increase awareness
Under the partnership, the CFTC’s Office of Customer Outreach and Education (OCEO) will work with groups such as the American Bankers Association Foundation, the SEC and the Financial Industry Regulatory Authority (FINRA) to raise awareness of these scams through educational materials to enlarge.
The initiative includes an infographic explaining the stages of the scam, from how victims are targeted to how the fraud progresses. It also highlights warning signs and offers advice for those who may be affected.
In addition, OCEO and its partners have released an investor alert detailing how scammers gain trust and manipulate victims through unsolicited messages. The warning encourages consumers to avoid suspicious communications and report such messages to authorities.
The CFTC’s campaign includes collaboration with several other federal agencies, including the FBI, the Internal Revenue Service’s Criminal Investigation Unit, and the Department of Homeland Security. Together, these groups want to provide the public with tools and knowledge to prevent fraud.
Rise of the pig slaughterhouse
The latest Chainalysis 2024 Crypto Crime Report shows that “pig slaughter” has become the most profitable form of crypto scam this year, with victims losing billions.
These scams, in which fraudsters gradually build trust with their victims through online relationships, often through texting or dating apps, have developed rapidly. Scammers convince victims to invest in fake crypto projects, only to later disappear with their money.
The report notes that 43% of scam inflows in 2024 went to wallets that became active in the same year, reflecting a wave of new scams. These operations are becoming increasingly efficient, with the average scam lifespan dropping significantly, from 271 days in 2020 to just 42 days in 2024.
Scammers also use shorter, more targeted campaigns, making it harder for law enforcement to detect and disrupt them.
Additionally, illegal marketplaces fuel these scams by selling skilled social media profiles, which scammers buy and use to appear legitimate. These types of markets have seen over $10 million in crypto flows in the last two years.