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How the scam works

Pig butchering is a grift in which a scammer encourages their target to open an account and invest funds at a seemingly legitimate crypto exchange that is actually controlled by the scammer and their co-conspirators.

The fake platform will typically show significant gains and allow the individual to withdraw funds in the initial stages to trick them into believing the scam is real and the fake cryptocurrency is a good bet. But once the victim puts a substantial amount of money in, they’ll find they’re unable to withdraw it.

Sometimes the scam will continue, with fraudsters asking for additional investments, taxes or fees, promising them these payments will allow them to gain access to their accounts.

And often, the victim ends up emptying their savings and investment accounts, borrowing from friends or family or max out their credit cards or take out a loan against their home.

Datta, a 37-year-old director at a multinational tech company in Philadelphia, explained that Mali convinced her to give trading in crypto a go. He sent her a download link to what appeared to be the app SoFi — complete with two-factor authentication and customer service.

When Datta later tried to withdraw her money from the app, she got a message that she had to first pay a 10% personal tax.

She contacted her brother, who is a lawyer, and with the help of a private investigator, they determined she’d been a victim of pig butchering.

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What to watch out for

While Datta worked a high-paying job and her family was able to bail her out of debt, she still had to sell her car, look for a cheaper apartment, and contend with the emotional repercussions of the experience.

Many victims of romance fraud find themselves with heavy debt and no savings to fall back on. Here’s how to avoid putting yourself in a similar situation.

  • Do your research. Look the other person up online to verify their identity — check for any social media accounts or LinkedIn profiles that can confirm they are who they say they are.
  • Watch out for “love bombing.” This is the term for when a suitor creates a heightened sense of emotion or declares strong feelings early on in a courtship. This is a common red flag in romance scams.
  • Get them on camera. Datta told The Philadelphia Inquirer that Mali made excuses for not meeting her in person, like a business trip in San Francisco and his uncle being terminally ill. He only video chatted with her twice and both times very briefly, not letting the camera remain on his face for too long.
  • Keep your private details private. Talking about finances too soon or asking for financial or confidential information can be a huge red flag. Do not, under any circumstances, give out your information — you could risk falling prey to identity theft as well.
  • Be alert for “get rich quick” schemes. Be wary of anyone who recommends a trading app that supposedly delivers high profits, or tells you about their own big returns. Don’t click on any download links to sites or apps they send you, even if they appear legitimate.

As with any investment opportunity, it’s incredibly important to do your own research first and not put your money into something just because someone you trust recommends it.

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About the Author

Serah Louis

Serah Louis

Reporter

Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

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The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.