Loading...

Preventing ‘Pig Butchering’ Scams: A Modern Investment Fraud

Published: May 15, 2024 by Alex Lvoff

The world of finance can be a dangerous place, where cunning schemes lurk in the shadows, ready to pounce on unsuspecting victims. In the ever-evolving landscape of financial crime, the insidious ‘pig butchering’ scam has emerged as a significant threat, targeting both financial institutions and their clients.

What is a ‘pig butchering’ scam?

‘Pig butchering’ scams are named after the practice of farmers fattening up their livestock before “butchering” them. This comparison describes the core of ‘pig butchering’ scams, where criminals entice victims to participate in investment schemes and cryptocurrency fraud.

Originating in Southeast Asia and now rampant in the United States, these scams often start with online interactions via social media or dating applications. Scammers build trust with the victim, eventually gaining access to their online accounts. They “fatten the pig” by enticing more cryptocurrency investments and then make off with their ill-gotten gains.

The repercussions are staggering, with reported losses exceeding $3.5 billion in 2023 alone according to an AP News article, and around 40,000 victims in the United States, including cases of losses as massive as $4 million.

The real-life impact

The story of “RB,” a San Francisco man who engaged with a scammer named “Janey Lee,” serves as a stark warning. Through social media, Janey orchestrated an elaborate scheme, promising “RB” substantial returns in cryptocurrency investment. Seduced by false promises, “RB” emptied his life savings into the scam, only to be rescued by a Federal Bureau of Investigation (FBI) intervention, narrowly avoiding financial ruin.1

Malicious actors are improving their targeting skills, and often pursue executives and victims with a large sum of money, such as C-level officials from financial institutions. This past February, a $50 million pig slaughtering fraud incident caused the CEO of a local bank in Kansas to lose all his funds and the bank to collapse a few months later.

FinCEN’s vigilance and updates

The Financial Crimes Enforcement Network (FinCEN) remains vigilant, issuing advisories to financial institutions to combat ‘pig butchering’ scams. Their latest advisory highlights evolving scam tactics, including aggressive promotions, using money mules for illegal fund transfers, and leveraging new financial products like decentralized finance (DeFi) platforms to obfuscate transactions.

FinCEN also warns about red flags such as large and sudden investments from older customers, quick fund withdrawals after big deposits, and the frequent use of coins or mixers that hide transactions. Financial institutions are encouraged to:

  • Report any suspicious activities by using specific terms like “pig butchering fraud advisory” in their reports to make analysis and response easier.
  • File suspicious activity reports (SARs) using the key term “FIN-2023-PIGBUTCHERING.”
  • Guide potential victims to report to the FBI’s IC3 or the Security and Exchange Commission (SEC’s) reporting system.

A call to action for financial institutions

The fight against ‘pig butchering’ scams requires proactive measures from financial institutions:

  • Enhance fraud detection and anti-money laundering (AML) programs: Implement robust systems compliant with regulatory guidelines, conduct thorough customer enhanced due diligence, and leverage fraud detection software to spot anomalies and red flags., and leverage fraud detection software to spot anomalies and red flags.
  • Leverage data analytics: Utilize data analytics tools to monitor customer behavior, identify irregular patterns, and swiftly detect potential ‘pig butchering’ activities.
  • Employee training: Educate employees on scam risks, fraud detection techniques, and FinCEN red flags to empower them as the first line of defense., and FinCEN red flags to empower them as the first line of defense.
  • Community education: Educate customers on recognizing and avoiding investment scams, promoting awareness, and safeguarding their assets.

Navigating challenges with effective solutions

‘Pig butchering’ scams cause not only money losses but also personal troubles and reputational harm. Awareness, learning, and cooperation are essential in protecting from these complex financial fraudsters, securing the safety and confidence of your institutions and stakeholders.

By combining the best data with our automated identification verification processes, you can protect your business and onboard new talents efficiently. Our industry-leading solutions employ device recognition, behavioral biometrics, machine learning, and global fraud databases to spot and block suspicious activity before it becomes a problem.

Learn more

1San Francisco Chronical (2023). Crypto Texting Scam

*This article includes content created by an AI language model and is intended to provide general information.

Related Posts

Tenant screening fraud is rising, with falsified paystubs and AI-generated documents driving risk. Learn how income and employment verification tools powered by observed data improve fraud detection, reduce costs, and streamline tenant screening.

Published: September 4, 2025 by Ted Wentzel

In today’s digital lending landscape, fraudsters are more sophisticated, coordinated, and relentless than ever. For companies like Terrace Finance — a specialty finance platform connecting over 5,000 merchants, consumers, and lenders — effectively staying ahead of these threats is a major competitive advantage. That is why Terrace Finance partnered with NeuroID, a part of Experian, to bring behavioral analytics into their fraud prevention strategy. It has given Terrace’s team a proactive, real-time defense that is transforming how they detect and respond to attacks — potentially stopping fraud before it ever reaches their lending partners. The challenge: Sophisticated fraud in a high-stakes ecosystem Terrace Finance operates in a complex environment, offering financing across a wide range of industries and credit profiles. With applications flowing in from countless channels, the risk of fraud is ever-present. A single fraudulent transaction can damage lender relationships or even cut off financing access for entire merchant groups. According to CEO Andy Hopkins, protecting its partners is a top priority for Terrace:“We know that each individual fraud attack can be very costly for merchants, and some merchants will get shut off from their lending partners because fraud was let through ... It is necessary in this business to keep fraud at a tolerable level, with the ultimate goal to eliminate it entirely.” Prior to NeuroID, Terrace was confident in its ability to validate submitted data. But with concerns about GenAI-powered fraud growing, including the threat of next-generation fraud bots, Terrace sought out a solution that could provide visibility into how data was being entered and detect risk before applications are submitted. The solution: Behavioral analytics from NeuroID via Experian After integrating NeuroID through Experian’s orchestration platform, Terrace gained access to real-time behavioral signals that detected fraud before data was even submitted. Just hours after Terrace turned NeuroID on, behavioral signals revealed a major attack in progress — NeuroID enabled Terrace to respond faster than ever and reduce risk immediately. “Going live was my most nerve-wracking day. We knew we would see data that we have never seen before and sure enough, we were right in the middle of an attack,” Hopkins said. “We thought the fraud was a little more generic and a little more spread out. What we found was much more coordinated activities, but this also meant we could bring more surgical solutions to the problem instead of broad strokes.” Terrace has seen significant results with NeuroID in place, including: Together, NeuroID and Experian enabled Terrace to build a layered, intelligent fraud defense that adapts in real time. A partnership built on innovation Terrace Finance’s success is a testament to what is  possible when forward-thinking companies partner with innovative technology providers. With Experian’s fraud analytics and NeuroID’s behavioral intelligence, they have built a fraud prevention strategy that is proactive, precise, and scalable. And they are not stopping there. Terrace is now working with Experian to explore additional tools and insights across the ecosystem, continuing to refine their fraud defenses and deliver the best possible experience for genuine users. “We use the analogy of a stream,” Hopkins explained. “Rocks block the flow, and as you remove them, it flows better. But that means smaller rocks are now exposed. We can repeat these improvements until the water flows smoothly.” Learn more about Terrace Finance and NeuroID Want more of the story? Read the full case study to explore how behavioral analytics provided immediate and long-term value to Terrace Finance’s innovative fraud prevention strategy. Read case study

Published: September 3, 2025 by Allison Lemaster

BIN attacks are a growing threat in today’s digital payments ecosystem. Learn how to mitigate these attacks to reduce losses.

Published: August 27, 2025 by Theresa Nguyen