Recently, EverC VP and thought leader Melissa Sutherland was joined by Matt Friedman, CEO of the Mekong Club and a modern slavery expert, and Adrien Cheek, a threat hunting and intelligence leader, to share insights on “pig butchering” and how this super scam impacts the payments industry in a Merchant Risk Council (MRC) webinar.
Webinar overview
Pig butchering scams have gotten a great deal of media coverage in the U.S. in the past year, first last November when the federal government seized seven web domains used in a pig butchering crypto scam. Then in April of this year, the U.S. Department of Justice seized over $112 million in funds linked to cryptocurrency investment scams.
In September 2023, FinCEN published a warning on the high frequency of the scam and amended SARS filing requirements. “To shift that quickly and get not only the notice out but to shift the SARS filing requirements to make this a target area to me is incredible,” said Melissa. “It speaks to the volume of the victimization happening in our economy but in everybody else’s economy. This is not unique to the United States.”
How pig butchering scams work
Melissa defined the pig butchering scam and its steps. “Scammers persuade the targets to deposit funds and digital assets, connect to cryptocurrency investment apps, simulating trades that appear to be generating income and genuine activity. We have victims that are coerced into investing more and more. Then eventually the withdrawals are blocked or aired out -- the platform completely disappears.”
The scammers connect with victims initially through various digital channels, such as dating apps and social media sites.
The link to human trafficking
However, those duped out of money aren’t the only victims of this ruthless criminal network. The people carrying out the scams, often in poor regions of the world, are typically trafficked and forced to do it against their will.
“We’re talking about real people being beaten, tortured, and killed. People having their entire freedom taken away from them. We’re talking about people who lose their entire life savings. We’re talking about a devastating impact on hundreds, if not thousands, if not tens of thousands of people,” said Matt. Matt also made the point that we can all be part of stopping this scam, starting with bringing more awareness to it.
What can the payments industry do to stop scams?
The payments industry has a unique opportunity to fight and take down the perpetrators of these scams, which pose a global threat. This is because most scam websites use a similar pattern, and the money is all funneled through one payment channel behind the scenes. “Scammers don't want to manage indidivual bank accounts,” explained Adrien, “so targeting one digital wallet will potentially impact 800 scam websites, and one merchant could potentially target 1000 websites. That’s significant disruption for the bad actor.”
If you missed this valuable webinar, the full recording is available to MRC members.
EverC will also host more than a dozen industry thought leaders to talk about how to spot and root out scams like pig butchering at our upcoming event, Safer Ecommerce Day. Register for this free online event to learn how to disrupt illicit activity and make ecommerce – and extension, the world – safer for all.
