CFTC and Regulators Issue Alert on 'Pig Butchering' Cryptocurrency Relationship Scams

The Commodity Futures Trading Commission’s Office of Customer Outreach and Education (OCEO) has announced new collaborative initiatives with federal, state, and private sector organizations to warn consumers about cryptocurrency relationship investment scams, commonly referred to as "pig butchering." These confidence frauds are estimated to cost Americans billions of dollars every year. As part of the outreach campaign, the CFTC is partnering with the American Bankers Association Foundation, the Federal Bureau of Investigation (FBI), the Financial Industry Regulatory Authority (FINRA), IRS Criminal Investigation, the U.S. Department of Homeland Security, the Financial Crimes Enforcement Network (FinCEN), the U.S. Secret Service, and the U.S. Securities and Exchange Commission (SEC). Together, they are distributing educational resources that illustrate the complete lifecycle of the fraud, from how victims are initially targeted and groomed over time to how the scam concludes when funds are stolen. The OCEO has also partnered with the SEC’s Office of Investor Education and Advocacy, FINRA, and the North American Securities Administrators Association (NASAA) to distribute an investor alert. The alert explains how perpetrators use psychological tactics to deceive everyday individuals and knowledgeable investors alike, emphasizing that even cautious investors can fall victim to these schemes. Regulators emphasize that individuals can protect themselves by refusing to respond to unexpected or unsolicited text messages from unknown senders. Unwanted messages should be reported using mobile junk reporting features or forwarded directly to 7726 (SPAM). Victims of cryptocurrency investment schemes are urged to report incidents to the FBI’s Internet Crime Complaint Center at IC3.gov. Helpful documentation includes names of the trading platforms involved, cryptocurrency wallet addresses, transaction hashes, bank account details, and copies of all communications with the scammers.