The U.S. Attorney’s Office for the Eastern District of Virginia announced today the seizure of seven domain names used in a cryptocurrency fraud scheme (opens in new tab).
Posing as official websites under the Singapore International Monetary Exchange, the seven (spoofed) domain names were the destination pointed toward victims of what’s known as a “pig butchering” stratagem. Pig butchering, in this sense, means that the scammers leveraged social engineering to develop a relationship with their victims. Posing prospective lovers through dating apps, newfound social media friends, or just happy acquaintances gained from a wrong cellphone number, scammers use this method to ingratiate themselves with victims, eventually building up to a business opportunity related to crypto.
Victims were then persuaded to invest their funds in scammer-controlled cryptocurrency apps (with the promise of disproportionate gains, we’d expect). Yet it’s precise as you imagined it would be: as soon as the tokens left the victims’ wallets towards the scammers’, lovers disappeared, and friends evaporated – taking the funds with them.
In the grand scheme of things, cryptocurrency scams are still a drop of water compared to those in the traditional finance area (only around 4.2% of humanity’s 8 billion people, or approximately 320 million, are estimated to possess or have interacted with crypto assets (opens in new tab)). However, this certainly doesn’t feel true to the millions of ordinary people who have lost funds to any of crypto’s several high-impact convulsions – such as what happened to Celsius, Terra Luna, and most recently, perhaps more impactfully, Sam Bankman-Fried’s FTX implosion.
Pig butchering is nothing new either, but the fact that crypto itself operates entirely in the digital sphere with transactions, contacts, job offers, and corporations being reached only through digital means (most notably, Twitter), it’s likely that its users are more comfortable with operating in a digital-only sphere, priming them for these types of scams. The FBI has released Public Service Announcements (PSA) regarding increasing cybercriminal activity surrounding crypto, and there’ve been a couple of high-impact law enforcement operations. That said, just like in traditional crime venues, it’s an uphill battle. Scams such as these are bound to increase in frequency alongside the number of people interacting with the cryptocurrency ecosystem.