A week before Valentine's Day, the Commodity Futures Trading Commission’s Office of Customer Education and Outreach (OCEO) issued an advisory notice to dating and messaging apps and social media users, warning them against the rampant romance scams involving cryptocurrencies and foreign exchanges. These scams are also known as “sha zhu pan” or pig butchering.
Pig Butchering Scams
According to the regulatory advisory yesterday (Wednesday), fraudsters offering financial services or investment advice on dating apps or social media are called romance scams. These scams are very sophisticated, and fraudsters sometimes gain the victims' trust for weeks, a period called grooming, before pitching any fraudulent scheme.
“Financial grooming frauds can happen at any time, but Valentine’s Day is a perfect opportunity to remind people that dating and messaging apps and social media can be platforms for scams and fraudulent activity,” OCEO’s Director, Melanie Devoe said. “As the old saying goes, if it sounds too good to be true, it probably is.”
Organized Crime Gangs Are Running Such Scams
The regulatory agency asked the users of apps and social media to be cautious of any texts and messages from strangers that promote cryptocurrency investments. It stressed that such texts could be from international criminal organizations.
These scams are so sophisticated that they “take advantage of even the savviest of investors.”
According to the CFTC, some alarm bells for identifying such scams are the attempts to move conversations from dating or social media platforms to private messaging apps and “claims of wealth from cryptocurrency or foreign currency trading due to insider information.”
The targeting of victims on dating and social media apps has been going on for years. Although it was the first warning by the CFTC, other global regulators issued multiple warnings against such scams.
The CFTC highlighted that more than $3.5 billion was siphoned in 2023 by these financial romance and grooming gangs. The agency recently busted Debiex for alleged misappropriation of $2.3 million by soliciting Americans with popular romance scam tactics.
Last December, the US federal prosecutors charged four individuals for laundering more than $80 million obtained through "pig butchering" scams and other investment scams.
