In the past couple of years, you may have heard the term “pig butchering scam”, an English rendition of the Chinese “sha zhu pan”. It is a crude term, to be sure, but incredibly useful, as it labels a specific scam pattern which, originating in China, became prevalent internationally around the time of the COVID-19 pandemic and these days is among the most frequent types of crime we at CipherBlade encounter.
These scams are now conducted at scale predominantly from China and South-East Asia. The individuals executing the scam are rarely its planners or originators, working according to highly-developed scripts to trick victims and often themselves victims of human trafficking. We say this for general context, but in no way to excuse their conduct.
The scammers create personas pretending to be the kind of people whom their prospective victims might be happy to meet, such as successful investors, wealthy heirs with insider information, or simply attractive single professionals. They are designed to appeal to the victim’s interests or fears and to suggest an opportunity of the economic or romantic kind.
There are various ways in which the scammers initiate contact with potential victims. They may use text messages or even phone calls, pretending to have texted or called the wrong number, transforming this “happy coincidence” into an acquaintance. Or they will send DMs on social media like Facebook, Instagram and Twitter; messages in messenger apps like WhatsApp and Telegram; or use dating apps to get in touch.
The scammers then build a relationship and trust over weeks, months, and sometimes even years through daily or at least very frequent contact. The conversation is inevitably stirred in a flirtatious or at least sufficiently personal direction for victims to share details about their lives. These details are mined for vulnerabilities or motivations that the scammer exploits to subsequently convince the victim to invest money.
Scammers will generally segue into financial topics in a seemingly natural way to avoid arousing suspicion. For example, they will pretend to be leading a lavish lifestyle and wait for the victim to inquire how they fund it. Or they hint at recent investment profits until the victim asks how they can get in on those. Eventually they will share an investment opportunity of some sort, often a “trading platform” which is supposed to passively generate returns. Often this is done in a high-pressure way, where the investment opportunity is supposedly only available for an extremely short time window.
An alternative avenue to extract money from the victim, often employed in the romance scam version, is for the scammer to bring up debts that need to be settled before they and the victim can embark on a life together.
When a fake “trading platform” is used to which the victim deposits funds, this typically comes with a complete website where the victim logs in, gets shown a deposit address, and has their deposits reflected in the interface. The site will also show fictitious gains over time that the victim supposedly made on the deposits – typically with entirely unrealistically high returns.
At some point, the victim becomes either reluctant to invest more money or wants to withdraw some of their supposed gains. If the amount is small, the withdrawal may even be processed in an attempt to increase trust. A very typical pattern is that when a victim asks to withdraw funds, they will be met with a request to pay in more money to cover some made-up fees or alleged tax burden. Of course, no payout will ever be forthcoming and at some point, the scammer simply breaks contact and disappears.
When someone you don’t know contacts you online and seems friendly out of the blue, ignore them. This may go against our instincts as social animals, but it’s an excellent and necessary way to protect yourself against scams. This is a bit more difficult on dating apps, where you are supposed to get in touch with people you don’t know – but a sha zhu pan scammer will avoid meeting in person, and if you’re not meeting someone from a dating app in person, what are you doing anyway? (Patented CipherBlade dating advice.)
It does rarely happen that a victim meets a scammer in person who runs a scheme that follows the structure of a pig butchering scam. In that case, the way to avoid becoming a victim is to be religiously attentive to the second red flag: the way in which they build trust with you to induce you to invest in a scheme that seems too good to be true.
When someone whose acquaintance you made recently recommends you to invest in something, be skeptical. Especially if the investment is supposed to be a secret tip and/or they cannot explain to you in detail how it works. And double-especially if the supposed returns are something absurd like 100% a month. It is not easy, psychologically – sha zhu pan scammers to do everything to set things up in such a way that victims want to believe them. The urge is natural – but resist it, this is really all we can say.
If you realize that you have become the victim of a scam, you are not entirely without recourse.
If you are still in contact with the scammer, do not let them know that you are on to them. Attempt to withdraw some funds, and if they question you about it, explain that you need to withdraw a small amount for some unexpected emergency but that you will put it back and invest more as soon as you can. You will not get the entire sum back this way, but you may be able to save at least a small amount.
In general, we advise you to report the incident to law enforcement in your country. If you happen to be in the United States, you should report the scammer’s contact information to the FBI via IC3, the US Secret Service via your local USSS field office, and your appropriate local law enforcement agency.These organizations have been conducting investigations into sha zhu pan scammers for years and may be able to tie this information to another case.
Unfortunately, law enforcement agencies are often ill-equipped to handle crypto-related crime, and even those agencies which are capable of it are so overwhelmed that the required loss threshold for them to actually act on a report is very high.
This is where CipherBlade can help. Pig butchering scams typically come with a characteristic and not overly sophisticated laundering pattern for the stolen funds, which is easily detected on-chain with appropriate forensics tools. That means the most important hurdle is to get someone to act on it who has the necessary legal powers to seize funds. This can be law enforcement, who are often able to take on your case after all when supported by us, as we can take a lot of the necessary work off their plate. We also cooperate with law firms who, when advised by us and acting on the basis of our investigative findings, can attain appropriate freeze and seizure orders through judicial proceedings. The process is not easy or fast, but depending on the exact circumstances, our experience shows that it can be done.
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