On September 11, the Commodity Futures Trading Commission (CFTC) announced two key partnerships aimed at tackling the surge in “pig butchering” scams—fraud schemes that are increasingly plaguing U.S. consumers, particularly in the cryptocurrency space.
The CFTC’s Office of Customer Outreach and Education (OCEO) spearheaded the initiative, seeking to protect individuals from these elaborate financial scams. The partnerships will focus on raising awareness about pig butchering fraud, a type of relationship scam where perpetrators build victims’ trust before ultimately stealing significant amounts of money.
CFTC Teams Up with Industry Leaders to Fight Fraud
The CFTC is collaborating with the American Bankers Association Foundation and private regulators to release an educational infographic that details the tactics and risks associated with pig butchering scams. In addition, the agency has partnered with several prominent regulatory bodies, including the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), and the North American Securities Administrators Association (NASAA), to develop a comprehensive investor alert.
This alert will provide consumers with clear guidance on how scammers manipulate victims into financial traps, helping individuals recognize warning signs and protect their assets before it’s too late.
Melanie Devoe, Director of the CFTC’s Office of Customer Education and Outreach, highlighted the importance of these partnerships in preventing fraud: “By working closely with federal and state regulators, consumer protection groups, and other organizations, we aim to spread our message and reach potential victims before they fall prey to these scams,” she said.
Devoe emphasized that pig butchering scams, a form of “relationship confidence fraud,” have caused Americans to lose billions of dollars in recent years, making public education on the matter a top priority.
The Growing Threat of Pig Butchering Scams
Pig butchering scams, particularly in the cryptocurrency sector, are on the rise and have caused widespread financial harm. In these schemes, fraudsters exploit the trust of their victims, gradually convincing them to hand over increasing amounts of money, similar to the way a pig is fattened before slaughter.
Research by Professor John Griffin from the University of Texas at Austin revealed that over $75 billion was lost to pig butchering scams between January 2020 and February 2024. Most of the stolen funds have been funneled into global cryptocurrency exchanges, making the scams even harder to trace.
“These scams are orchestrated by large criminal networks that often operate with impunity,” Griffin explained in an interview with Time magazine.
A mid-year report from Chainalysis, the 2024 Crypto Crime Mid-year Update, confirmed that pig butchering schemes are now the most lucrative form of fraud in the blockchain sector. The report also noted that scammers are shifting away from traditional methods toward pig butchering, underscoring the growing need for regulatory alerts and consumer warnings.
The CFTC’s new partnerships mark an important step in educating the public and fighting back against these increasingly sophisticated fraud operations, with the hope of curbing the devastating financial impact on unsuspecting victims.