Nov 22, 2022 - Technology

Feds seize 7 web domains used in 'pig butchering' crypto scam

Illustration of a pair of handcuffs on 0 and 1 binary code numbers.

Illustration: Aïda Amer/Axios

Federal prosecutors seized seven domain names that cybercriminals used to collect crypto investments, prosecutors said Monday.

Why it matters: This week's action appears to be the first time federal prosecutors have taken action against operators of a so-called "pig butchering" crypto scam.

The big picture: The FBI estimates that these social-engineering scams resulted in consumers losing more than $429 million in 2021.

  • Pig-butchering schemes involve a cybercriminal befriending someone on a social media site, dating app or similar venue and then leveraging that friendship to get a crypto investment in one of their businesses.
  • The scam can also start with someone claiming they texted the wrong number and continuing to carry on a conversation anyway.

Details: The U.S. Attorney's Office for the Eastern District of Virginia seized seven domains used in a scam from May through August that pretended to be the Singapore International Monetary Exchange.

  • Five U.S. victims sent a total of more than $10 million to cybercriminals through those links, prosecutors said.
  • "The victims’ funds were immediately transferred through numerous private wallets and swapping services in an effort to conceal the source of the funds," according to a press release.

By the numbers: Overall, victims lose an average of $121,926 during pig-butchering scams, according to the Global Anti-Scam Organisation.

  • Roughly two-thirds of all victims are women between the ages of 25 and 40.
  • About a third of victims have a graduate degree.
  • 41% of victims met the scammer on Facebook, Instagram or WhatsApp.

The intrigue: The growth of pig-butchering scams comes as cybercriminals increasingly focus on social engineering, like hopping on the phone or building trust with victims, in their attacks to lure people into their schemes.

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