12/09/24

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The United States Commodity Futures Trading Commission (CFTC) has joined forces with various federal regulators and the American Bankers Association Foundation to alert consumers about the rising threat of “pig butchering” cryptocurrency scams. This collaboration aims to raise awareness and educate the public on how these schemes operate, particularly as they increasingly target individuals through deceptive methods.

The CFTC’s Office of Customer Outreach and Education is sharing a detailed infographic that outlines the mechanics of pig butchering scams. This one-page resource explains the typical progression of these frauds, starting from how scammers approach victims, often through social media, to establishing a fake romantic relationship that builds trust before leading them into fraudulent crypto investments. The infographic also offers guidance for those who might suspect they are falling victim to such scams.

Scammers expertly exploit the vulnerabilities of consumers, often convincing even the most cautious individuals. The CFTC emphasizes that the most effective way to combat these scams is to avoid engaging with potential fraudsters altogether. By forming partnerships with federal and state regulators, as well as consumer protection organizations, the CFTC aims to disseminate vital information widely and help prevent losses before they occur.

Several federal agencies, including the Securities and Exchange Commission, the Department of Homeland Security, and the FBI, will also disseminate this educational material. The urgency of this initiative follows alarming statistics that show a substantial increase in losses related to cryptocurrency fraud. In 2023 alone, Americans reported losing $5.6 billion to such scams, a 45% increase compared to the previous year. Particularly concerning is the rise in losses tied to romance scams, with over $215 million attributed to this method.

In addition to these concerns, the Federal Trade Commission has highlighted the growing use of crypto ATMs by scammers, noting that stolen funds have surged dramatically since 2020. Victims are often misled into depositing money into these ATMs, leading to significant financial losses. With older adults facing the highest risk, ongoing education and awareness efforts remain crucial in the fight against cryptocurrency scams.