“Pig Butchering” Scams Pose Growing Risks to Individuals and Businesses

Behavioral fraud and social engineering scams are getting more dangerous for everyone.

Despite the increasingly sophisticated weapons fraudsters have on hand to execute their scams, social engineering tactics remain one of their most effective ploys.

A study published by researchers at the University of Texas at Austin just last week found that at least $75 billion in cryptocurrency — far more than had been previously estimated — was stolen between 2020 and 2024 due mostly to a particular kind of behavioral fraud known as “pig butchering.”

Pig butchering scams are named after the practice of farmers fattening up their livestock before slaughtering them. The victim is the pig, while the bad actors are the butchers.

The way the scams tend to work is by establishing connections with victims via wrong-number text messages whose conversations eventually lead to promises of fake investments, which the victim must pour more and more money into before discovering the ruse. While the approach may seem far-fetched, even transparent in hindsight, victims of these scams routinely lose hundreds of thousands or even millions of dollars.

The bad actors themselves are becoming savvier with their targets and increasingly going after executives and victims with deeper pockets, including C-suite representatives from financial institutions.

News also broke this February that the July 2023 failure of a regional bank in Kansas resulted from its CEO falling for a $50 million pig butchering scam.

Intelligence data, in collaboration with Hawk AI, found that about a third of Big Tech and FinTech firms have experienced fraud in recent months, while about 43% of Financial Institutions in the U.S. experienced an increase in fraud this year relative to 2022, resulting in a rise in fraud losses increasing by about 65% from $2.3 million in 2022 to $3.8 million in 2023.

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