Crime Prevention & Safety

Sha Zhu Pan or Pig Butchering Explanation and History

The pig butchering scam is a type of fraud in which criminals lure victims into digital relationships to build trust before convincing them to invest in cryptocurrency platforms. Unbeknownst to victims, the fraudsters control the platforms and will eventually take all the money and vanish.

Drawing its name from the Chinese phrase, Shazhupán, pig butchering scams are long-term con jobs that combine elements of romance scams, investment schemes, and cryptocurrency fraud. The objectionable term involves fraudsters building a relationship with their victims, metaphorically fattening the pig before deceiving them into making investments in fake business ventures before the “butchering” and bleeding out every penny.

Statistics and Information on Victim Profiles or Most Common Types of Approach (Linkedin/Social Media/Dating)

A small business owner. A university professor. A retiree. Three very disparate lives but with one thing in common: these individuals all fell victim to pig butchering. Also known by the phrase “Sha Zhu Pán” in reference to their apparent origins in South East Asia, these cryptocurrency scams rely on psychological manipulation to wipe out victims’ life savings on the promise of making large returns on their investments. 

Anyone can be a target, not just those who may traditionally be viewed as vulnerable. In fact, approaches tend to be focused on those with the means to invest, typically aged between 30 and 60, usually in full time employment or recently retired. A wide cross-section of victims have been seen globally, including those who you’d least expect; police officers, those familiar with investment products, graduate students, engineers, consultant doctors and those working in the virtual currency space. Unlike the stereotypical scam victim, many of them are highly educated and digitally savvy.

Victims commonly lose between KYD25,000 – KYD$100,000, although others lose many hundreds of thousands, with some unfortunately tricked into parting with over KYD $millions. Whilst it is possible, very few victims are able to get any money back. Whilst the actual frauds are often perpetrated by smaller scale fraud shops or teams of scammers, in the majority of occasions, criminals use a third-party money laundering service to obfuscate and hide the stolen funds within a huge and sophisticate network turning over billions (with a ‘B’) of dollars before being cashed out, usually to Chinese crime syndicates operating in South East Asia.

Pig butchering scams are a cousin of older-style online romance scams, which often have smaller-scale losses. While pig butchering sometimes uses romance as a tactic, scammers can also build other types of personal or professional relationships over time in order to convince their targets to invest more money.

Common Steps Involved in a Fraud - Here’s How a Pig Butchering Scam Plays Out

• The scammer — or “host” — initiates contact with a target online via social media, a dating app, a unprompted telephone call or by sending a “wrong number” text or WhatsApp message.
• Once hosts find a suitable target — the proverbial “pig” — they stay in constant contact to build a relationship.
• After earning the victim’s trust, the host encourages the victim to start cryptocurrency trading. The host will claim to have insider tips or family connections in the investment industry, and explain that massive returns are common.
• The host then encourages the victim to download an app — and offers to trade together, showing how easy it is to yield returns. However, it’s a fraudulent platform controlled by a gang of scammers. 
• Once victims join the platform, the host simulates trades to make it look like they’re earning profits. The host may even encourage victims to withdraw some of their “gains” to build their confidence.
• Convinced that everything is bonafide, victims invest larger and larger sums of money. Over time, the host continues to manipulate victims (and the platform) to keep them investing. This step is known as “fattening the pig” before a proverbial slaughter.
• Later, when victims try to withdraw their money, the platform will claim there’s an issue with the account — or will inform them that they need to pay massive fees and taxes to get their cash. 
• Eventually, the victim realizes the truth — and the fraudster (and platform) disappear. As all transactions happen on the blockchain, recovering the funds is almost impossible. 

Red Flags to Look Out For:

• You receive “wrong number” texts or WhatsApp messages from people you have never met
• Someone you meet online suddenly starts talking about crypto
• A match on a dating site quickly starts “love bombing”
• Scammers use emotional manipulation to build your trust
• A friend wants you to invest in a crypto exchange with “guaranteed” returns
• You’re told to download a “special” crypto trading or investment app
• Investment sites offer tiers with minimum investment amounts
• Your new contact offers to ‘trade’ with you to show you how it works
• You get a quick, small return on your initial investment
• You’re told you need to pay a “tax” or “fees” in order to withdraw your profits from a platform

Safety Tips and How to Avoid:

• Don’t respond to unsolicited text messages. Regardless of what the person is saying, you shouldn’t engage in conversation. Instead, delete the messages and block the number.
• Beware of any new person in your life who encourages you to invest in something. Never share any financial information, like your credit card numbers or bank account details.
• When it comes to online dating, you should always take things slowly until you truly know the person — which usually involves a few in-person meetings before taking things further.
• Be aware that frauds are carefully planned and patiently executed. Fraudsters are prepared to communicate with you for weeks if not months before introducing the subject of investments.
• Even friends or family members (not just online strangers) who encourage you to invest money in “get rich” opportunities may be unwitting victims of a pig butchering scam.
• Remember that even if it seems real, any website or app can be manipulated. Never join an investment platform suggested by someone whom you’ve only met online.
• If a platform promises high returns that sound too good to be true, stay away from it and end all contact with the associated people.
• If you aren’t confident enough to use an investment platform yourself without the help of an online stranger to explain it, you don’t know enough to invest. There are lots of resources on island to learn about investments.
• Think to yourself, why is someone who supposedly has the key to huge investment profits spending their time sharing this with people online they have never met in person.
• Don’t throw good money after bad. If you suspect you might be caught up in the early phases of a pig butchering scam and have lost money already, stop and contact the police. Paying more money to the scammer on whatever pretence or to a third party ‘investigator’ company will not help you.
• Stop putting money in as soon as you encounter any fee or tax. It’s a scam, and the only thing you can do is cut your losses and contact the police.

Advice if you Think you are Being Defrauded, including Police Contacts and Education:

• Report to police as early as possible – time really is of the essence.
• Collect together all information, including any correspondence, telephone numbers, email addresses, virtual currency transaction information.
• Tell police if you have been taken through ‘KYC’ with the scammer, i.e. that the scammer has a copy of your identification or passport.
• Advice, charities, mental health providers. Go easy on yourself, these people are clever and sophisticated.  Report to FBI’s IC3,