Cybercriminals have switched to strategies like pig butchering due to the short-lived nature of such scams, helping them evade law enforcement.
Blockchain analysis firm Chainalysis released the second installment of its mid-year crypto crime report for 2024, explaining the proliferation of pig butchering scams as cybercriminals move away from other schemes. These scams are often short-lived, allowing scammers to run away with victims’ funds before law enforcement steps in.
They have evolved out of sheer need as law enforcement agencies have gotten significantly better at tracking and ending cybercrime tactics that take longer to execute, like crypto-related Ponzi schemes. Pig butchering, a scam type in which bad actors “fatten up” victims, often posing as romantic interests, has gone up tremendously. Scammers play the role of love interests on social media and dating platforms and build trust with their victims. Once established, they pitch fraudulent crypto projects set up by their networks to invest in, which steal the funds through rug pulls and other methods.
Chainalysis studied the amount of illicit funds flowing to newly created wallet addresses and found a whopping 43% of proceeds, year-to-date (YTD), reaching addresses that sprung up in 2024. The newness of these addresses suggests short-lived exploit strategies like pig butchering. “One remarkable feature of the 2024 scam landscape is how much of the total YTD scam inflows have gone to wallets that became active this year, suggesting a surge in new scams,” the report read. “Notably, 43% of YTD scam inflows have gone to wallets that became active this year.”
Source: Chainalysis’ 2024 Crypto Crime Mid-Year Update Part 2
A Single Wallet Has Made Over $100 Million in 2024 Through Pig Butchering
Shockingly, a single wallet associated with pig butchering scams since 2022 raked in upwards of $100 million. The wallet is controlled by KK Park, a notorious pig butchering ring operating out of Myanmar. Chainalysis notes that its illicit revenues mostly come from various sources, one of which is the evident pig butchering. Another one is linked to extortion from family members of victims who are trafficked.
The report also noted other facts about pig-butchering scams, like scammers purchasing established social media and dating profiles to seem legitimate to victims from Chinese marketplaces. Furthermore, it mentioned how these scammers aggregate at the Cambodian marketplace Huione Guarantee to off-ramp their illicit crypto gains into fiat.
