Study by UT professor reveals pig-butchering scams have stolen over $75 Billion
UT researchers discovered that pig-butchering scammers have stolen significantly more money than previously predicted, tracking over $75 billion stolen through the cryptocurrency schemes, a Feb. 29 study reported.
Pig-butchering scams involve a scammer forging trust with the victim before taking their money. The name references farmers fattening hogs before slaughter, according to a Bloomberg article. These frauds have a complex victimology, as most of the scammers are victims of human trafficking across Southeast Asia, falsely promised high-paying jobs and forced to be scammers. For this reason, John Griffin, study author and finance professor, said this is by far the darkest topic he’s ever researched.
Griffin said he initially didn’t see a larger social impact in his research, but when drawn to the area of forensic finance, he realized he could help people by exposing the realities behind these crime conglomerates when a scam victim reached out to Griffin asking him for help.
“They actually asked me to help them recover their money, and I told them I couldn’t help recover their money, but to me, that was a turning point,” Griffin said. “I was on the fence on whether I should investigate this or not, so after I got that person reaching out to me, I determined that the next day that I was going to do something about this.”
The scam may begin with a wrong-number text to a vulnerable and lonely person, but soon descends into something far more sinister: scammers lure victims into making crypto “investments” that go directly to the scammers and their crime syndicate instead, the study reported. Scammers ask the victims to put in small amounts of money, but may gradually build up to taking their life savings. Then, the scammers disappear. In some cases, they may even coach the victims through their financial loss, Griffin said.
The UT research pair followed the flow of funds from Western-based entities to Eastern locales, tracing the transactions backward across blockchains that the same network likely controls, Griffin said. The study deemed Tether the currency of preference for these scammers, likely because it’s a “stable coin” and is easy to transfer back into USD and easier to split following the scam.
Financial crimes often go unreported due to the embarrassment and shame victims feel after falling for the scams, but the study lumps all the money together after tracking the transactions, providing a larger picture that previous research doesn’t account for, Griffin said.
“We want to shine a light on the scope of this to help people realize this has been a big problem for a long time and different things that regulators have done to crack down on this have not made as big of an impact as you might think,” said Kevin Mei, study author and graduate student. “We hope that law enforcement can hopefully devote more resources for something like this.”
