How Feds Plan to Fight Them

As the cryptocurrency space is evolving, it has attracted scammers as well. Every month we hear about hacks of crypto exchanges and exploits on various crypto protocols. Apart from these there are other kinds of scams growing rapidly in this ecosystem. One specific kind is the Pig Butchering scam. Federal agencies are getting ready to fight these scams. Let’s understand how these scams are taking place and how the Feds are planning to fight these.

What Is “Pig Butchering”?

The term “Pig Butchering” refers to a long term scam where criminals groom their victims first. They might take weeks or months to build trust and establish relationships. Their goal is to fatten up the victim before stealing their funds. These scams typically start with scammers posing as genuine investors or influencers approaching the victims on social media and building trust.

In many cases, the scammers even build love relationships with the victims making them fall. They convince the victim to invest in cryptocurrency schemes that promise high returns. Initially, the victim is provided with small returns to deepen the trust. Once that is built, the scammers convince them to invest big to get big returns. They even show fake proof of their returns and the lavish life they are living because of the scheme. Once the victim is fully invested, the scammers vanish with their funds.

Federal Agencies Take Action

In response to this threat, federal agencies have ramped up their efforts to combat these scams. The CFTC recently launched a collaborative initiative led by its Office of Customer Outreach and Education (OCEO). Partnering with groups like the American Bankers Association Foundation, the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA), the CFTC is working to educate consumers about these scams.

The agency has also released a comprehensive infographic that details how these scams operate. It breaks down the process, showing how scammers initially target victims, build relationships, and ultimately steal their money. The goal is to help people recognize the warning signs and protect themselves before it’s too late.

Collaboration Is Key

A major focus of this initiative is collaboration. More than 300 federal regulators and law enforcement officials from 15 different agencies came together at a recent Fraud Disruption Conference to develop strategies for preventing these scams. FBI agents, the U.S. Secret Service, and the Treasury Department were among the participants, reflecting how seriously the government is taking this threat.

At the conference, officials stressed that prevention is the best defense. They launched a public awareness campaign encouraging people to be wary of unsolicited messages from unknown senders. Using built-in phone features to report suspicious messages is one way to protect yourself. By raising awareness, they hope to stop these scams before they claim more victims.

What Can You Do?

No one is immune to these scams—not even experienced investors. The best way to protect yourself is to stay informed and be cautious. Always double-check the legitimacy of investment opportunities and avoid responding to unexpected messages. If something feels too good to be true, it’s probably a scam.

With billions at stake, the efforts by the CFTC and other federal agencies are critical. By staying aware and educated, you can avoid falling victim to these sophisticated scams. Remember, prevention is your strongest weapon.