CFTC Launches Partnerships Tackling Pig Butchering Scams

Author

Julia Smith

Author

Julia Smith

About Author

Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

Author Profile

Share

Copied

Last updated: 

September 12, 2024

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

The Commodity Futures Trading Commission (CFTC) announced two new partnerships on September 11 aimed at combating pig butchering scams across the United States.

The CFTC’s Office of Customer Outreach and Education (OCEO) has initiated these partnerships to protect potential victims from these increasingly damaging fraud schemes.

CFTC and Private Regulators Partner to Fight Fraud

According to the CFTC’s statement, the agency is collaborating with the American Bankers Association Foundation and private regulators to distribute an infographic designed to educate consumers about the risks and tactics of pig butchering scams.

In addition, the CFTC is working with the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association to create an investor alert.

This alert seeks to provide clear guidance on how pig butchering scammers manipulate victims into trusting them before defrauding them of their assets.

“Partnering with federal and state regulators as well as consumer protection groups and other organizations helps spread the CFTC’s customer education message and hopefully reaches people before they can get scammed,” said Melanie Devoe, Director of the CFTC’s Office of Customer Education and Outreach.

“These partnerships focus on a relationship confidence fraud, commonly referred to by perpetrators as ‘pig butchering,’ which is estimated to cost Americans billions each year,” she continued.

Pig Butchering Scams Gaining Traction

Pig butchering scams are increasingly common, especially in the cryptocurrency sector, and they can cause severe financial losses.

These fraud schemes occur when scammers exploit victims’ trust to gradually increase the amount of funds they receive, similar to fattening a pig before slaughter.

Earlier this year, Professor John Griffin from the University of Texas at Austin discovered that more than $75 billion had been lost to pig butchering scams between January 2020 and February 2024, with the stolen funds flowing into global cryptocurrency exchanges.

“These are large criminal networks, and they’re operating largely unscathed,” Griffin said in an interview with Time.

According to Chainalysis’ 2024 Crypto Crime Mid-year Update, pig butchering scams have generated more revenue than any other type of fraud this year.

The report also emphasizes that scammers in the blockchain sector are shifting from traditional fraud methods towards pig butchering schemes, making regulatory alerts and warnings more important than ever.