Increase in Crypto Scams Targeting Investors – PaymentsJournal
Crypto criminals are getting creative with a new scam tactic called pig butchering, which has resulted in $3.6 billion in stolen assets from crypto investors in 2024 alone. The main target of this scam isn’t bitcoin, but ethereum. According to a report released by Cyvers, a Web 3 security firm, there was a 40% increase in cyber threats this year compared to the previous year.
Ethereum is particularly vulnerable to pig butchering scams, with ethereum accounting for 18% of all stolen crypto funds in 2024 – quite a jump from the mere 2% for bitcoin. The blockchain tech behind ethereum uses smart contracts that automatically carry out transactions, making it easy for criminals to create one-time-use smart contracts that are hard to identify as fraudulent. And because these transactions are irreversible, once authorized, there’s no way to stop automatic payments.
The pig butchering scam involves a criminal persuading a victim to invest money in a fake transaction via social media, often related to crypto. The victim watches as their “pig” gets fattened over a period of a few weeks, making the investment appear to grow, which coerces them to continue investing more.
These scams are on the rise, and last year, cybersecurity firm Hacken revealed that rug pulls were the most common type of crypto scam, accounting for 65% of all incidents in the crypto world. A rug pull happens when a developer promotes a new currency as a great investment opportunity, then vanishes with investors’ funds.
It’s worth noting that no one, no matter how financially savvy, is immune to these scams. Even individuals like the CEO of a Kansas bank and Mark Cuban, the “Shark Tank” star and Dallas Mavericks owner, have fallen victim to pig butchering scams, losing millions of dollars in the process. So stay vigilant and be cautious, especially when dealing with investments and transactions, to protect yourself from falling prey to these elaborate schemes.
