Pig butchering—a drawn-out process in which criminals gradually entice victims to hand over assets—has become the number one fraud threat for crypto investors.
In 2024, pig butchering scams resulted in $3.6 billion in stolen assets from crypto investors. A report released by Cyvers, a Web 3 security firm, revealed that the most targeted currency in these scams was not bitcoin, the most popular cryptocurrency, but ethereum.
The report also highlighted a 40% increase in cyber threats this year compared to the previous year.
Ethereum is considered particularly vulnerable to such scams. According to separate analysis from Kryptocasinos, ethereum accounted for 18% of all stolen crypto funds in 2024, compared to just 2% for bitcoin.
Ethereum’s blockchain utilizes smart contracts, which automatically carry out transactions without the need for banks, brokers, or other third parties. However, criminals have found ways to create one-time-use smart contracts that are difficult to flag as fraudulent. Since smart contracts are irreversible, there is no way to halt automatic payments once they have been authorized.
The Latest in Scams
In pig butchering, a criminal uses a social media account to convince a victim to invest their money in a fake transaction, often involving crypto. The “pig” gets stuffed over several weeks, watching the apparent growth of their investment, which encourages them to invest even more money.
These types of scams appear to be on the rise. Last year, cybersecurity firm Hacken reported that rug pulls were the most common type of crypto scam, accounting for 65% of all incidents within the crypto ecosystem. A rug pull occurs when a developer promotes a new currency as a lucrative investment opportunity, then disappears, taking investors’ funds along with them.
Social media frequently plays a significant role in these crimes. Last year, Lloyds Bank issued a warning stating that 66% of investment scams are initiated through social media, particularly on Facebook and Instagram.
Everyone Is at Risk
Even the most financially savvy individuals are vulnerable to these scams. In August, the CEO of a Kansas bank pleaded guilty to embezzlement after falling victim to a pig butchering crypto scam. Ultimately, he transferred $47 million of the bank’s assets to the criminals, leading to the bank’s collapse.
Even Mark Cuban, the star of “Shark Tank” and owner of the Dallas Mavericks, admitted to being scammed, losing $870,000 to a crypto fraud after downloading a fake version of MetaMask, a crypto wallet used to manage ethereum-based assets.
