Coinbase, in collaboration with law enforcement agencies across the globe, has beefed up actions to protect investors from a new array of cyber attacks. US authorities, particularly the Federal Bureau of Investigation (FBI) and Lakewood Police, have been receiving complaints about the crypto scam and have now urged people to be vigilant against increasing cases of scams in the space.
Through a recent blog published on its platform, Coinbase alerted crypto users about a new crypto scam called “pig butchering.”
According to Coinbase, the scam is effective because it involves malicious actors building trust with victims over time, which could sometimes be weeks or even months before executing their elaborate scams.
The new fraud reportedly got its name from the Chinese term “Sha Zhu Pan.” It was named this way because of the scammers’ modus operandi, which sometimes involves making elaborate promises for romance and riches, typically ending in victims losing all their money.
The Lakewood Police reports stated that the pig butchering scam usually begins on social media, particularly on popular dating platforms like Tinder, with scammers convincing their victims to send money.
The intricacies of the pig butchering scam
Once the scammer establishes contact with a potential victim and convinces them to invest in a crypto project, they typically send details of the money invested increasing in value. This is intentionally done to throw the victim off balance and earn their trust. With that established, the scammer then encourages the victims to invest more. Once the scammer is done milking the victim, they disappear into thin air.
According to Forbes, romance scams, particularly the new wave of pig butchering crypto scams, have resulted in over $547 million in losses. And authorities believe if nothing is done to nip the bud, it will result in more unbridled losses.
Coinbase has been lauded for its role in exposing the scam. The exchange has now called for more awareness and actions from authorities to bring perpetrators to book.
