Chainalysis says pig-butchering is becoming national security threat
The multibillion-dollar scam known as “pig-butchering,” once treated as a consumer-fraud issue, has crossed a new threshold and is prompting concerns over national security.
In a podcast, Chainalysis head of national security intelligence, Andrew Fierman, and former prosecutor Erin West, founder of cross-sector anti-scam nonprofit Operation Shamrock, discussed how pig butchering is becoming a threat to national security.
“So if anybody is touching money in any way, you’re part of this. So you need to be prepared to understand the threat and the gravity of what’s happening on a national security level,” West said, highlighting the importance of education and awareness in combating crypto scams.
A pig-butchering scam is a long-term fraud strategy in which criminals attempt to establish trust with a victim, often through romance or friendship, before steering them into a fake cryptocurrency investment platform and draining their funds.
The growing scale of pig-butchering scams
In the podcast, the duo discussed how fraud rings across Southeast Asia operate dormitory-style scam compounds where trafficked workers contact unsuspecting victims, foster trust through romance and then push them into fake crypto investments with the goal of draining funds.
In 2023, the US Department of Justice (DOJ) seized about $112 million in crypto linked to pig-butchering scams. In a February report, Chainalysis said that pig-butchering scams increased by almost 40% year-over-year in 2024, while overall crypto scam revenue exceeded $9.9 billion.
In addition, one under-reported area of pig-butchering is that victims are often hit twice. The duo said in the podcast that after the initial scam, victims sometimes received follow-up contact from fake recovery firms claiming to assist in recovering the money.
“Once this happens to you, you will be put on a list […] and you are even more likely to get hit up again,” West said.
Fierman and West said these scams have matured into a transnational crime model, blending human trafficking, money laundering and crypto rails, making them far more complex than your everyday fraud.
Fierman suggested that blockchain’s transparency offers an opportunity for regulators, exchanges and virtual asset service providers (VASPs) to disrupt the scams.
“One of the benefits of the blockchain, at least as the mechanism for this, is that there is potential opportunity for disruption if it’s enabled right,” he said. “And the transparency of the blockchain gives that opportunity to potentially disrupt at the point of cash out.”
How authorities are stepping in
With the scams having a much wider impact, governments are stepping in. On Nov. 12, the DOJ announced the formation of a “Scam Center Strike Force” to target Chinese-linked transnational criminal organizations behind crypto investment fraud in Southeast Asia.
Simultaneously, regional law enforcement departments are enforcing freezes and sanctions to combat the issue. On Aug. 27, law enforcement in Asia Pacific (APAC) collaborated with Chainalysis, OKX, Tether and Binance to freeze $47 million in pig butchering funds.
The strategy is not simple, but it is clear. This is to disrupt the on-ramp and off-ramp points for scammers, sanction the facilitators and build private-public partnerships.
“My advocacy about transnational organised crime has been consistently: Use every tool in our arsenal. Sanctions, indictments, diplomatic pressure,” West said.
Related: Scammers posed as Australian police to steal crypto, authorities warn
Red flags to watch out for
Like many scams, there are ways to spot a pig-butchering scam. The scam often involves manipulating feelings, which means someone expressing strong feelings for you too quickly through online channels, especially without meeting, may be a scam.
It becomes more suspicious if whoever you’re in touch with refuses to share personal information or professional credentials.
One of the main signs it’s a pig-butchering scam is when the person starts asking for money, even if they claim it’s for an emergency.
This also takes the form of risk-free investments and easy money, often showing fake screenshots of massive profits to convince their victims to invest.
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Millionaire Tory donor Malcolm Offord has defected to Reform UK, saying he would be campaigning “tirelessly” to “remove this rotten SNP government”.
Nigel Farage announced the former Conservative life peer’s defection during a rally in the Scottish town of Falkirk, where regular anti-immigration protests have taken place outside the Cladhan Hotel – which is being used to house asylum seekers.
Mr Farage, Reform UK’s leader, said he was “delighted” to welcome Greenock-born Lord Offord to Reform, describing his defection as “a brave and historic act”.
He added: “He will take Reform UK Scotland to a new level.”
During a speech, Lord Offord, who previously donated nearly £150,000 to the Tories, said he would be quitting the Conservative Party and giving up his place in the House of Lords as he prepares to campaign for a seat in Holyrood in May.
The 61-year-old said he wanted to restore Scotland to a “prosperous, happy, healthy country”.
“Scotland needs Reform and Reform is coming to Scotland,” he told the rally.
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“Today I can announce that I am resigning from the Conservative Party. Today I am joining Reform UK and today I announce my intention to stand for Reform in the Holyrood election in May next year.
“And that means that from today, for the next five months, day and night, I shall be campaigning with all of you tirelessly for two objectives.
“The first objective is to remove this rotten SNP government after 18 years, and the second is to present a positive vision for Scotland inside the UK, to restore Scotland to being a prosperous, proud, healthy and happy country.”
The latest defection comes as Mr Farage finds himself at the centre of allegations of racism dating back to his time in school.
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Claims made against Nigel Farage
Sky News reported on Saturday that a former schoolfriend of Mr Farage claimed he sang antisemitic songs to Jewish schoolmates – and had a “big issue with anyone called Patel”.
Jean-Pierre Lihou, 61, was initially friends with the Reform UK leader when he arrived at Dulwich College in the 1970s, at the time when Mr Farage is accused of saying antisemitic and other racist remarks by more than a dozen pupils.
Mr Farage has said he “never directly racially abused anybody” at Dulwich and said there is a “strong political element” to the allegations coming out 49 years later.
Reform’s deputy leader Richard Tice has called the ex-classmates “liars”.
A Reform UK spokesman accused Sky News of “scraping the barrel” and being “desperate to stop us winning the next election”.
The European Commission’s proposal to expand the powers of the European Securities and Markets Authority (ESMA) is raising concerns about the centralization of the bloc’s licensing regime, despite signaling deeper institutional ambitions for its capital markets structure.
On Thursday, the Commission published a package proposing to “direct supervisory competences” for key pieces of market infrastructure, including crypto-asset service providers (CASPs), trading venues and central counterparties to ESMA, Cointelegraph reported.
Concerningly, the ESMA’s jurisdiction would extend to both the supervision and licensing of all European crypto and financial technology (fintech) firms, potentially leading to slower licensing regimes and hindering startup development, according to Faustine Fleuret, head of public affairs at decentralized lending protocol Morpho.
“I am even more concerned that the proposal makes ESMA responsible for both the authorisation and the supervision of CASPs, not only the supervision,” she told Cointelegraph.
The proposal still requires approval from the European Parliament and the Council, which are currently under negotiation.
If adopted, ESMA’s role in overseeing EU capital markets would more closely resemble the centralized framework of the US Securities and Exchange Commission, a concept first proposed by European Central Bank (ECB) President Christine Lagarde in 2023.
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EU plan to centralize licensing under ESMA creates crypto and fintech slowdown concerns
The proposal to “centralize” this oversight under a single regulatory body seeks to address the differences in national supervisory practices and uneven licensing regimes, but risks slowing down overall crypto industry development, Elisenda Fabrega, general counsel at Brickken asset tokenization platform, told Cointelegraph.
“Without adequate resources, this mandate may become unmanageable, leading to delays or overly cautious assessments that could disproportionately affect smaller or innovative firms.”
“Ultimately, the effectiveness of this reform will depend less on its legal form and more on its institutional execution,” including ESMA’s operational capacity, independence and cooperation “channels” with member states, she said.
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The broader package aims to boost wealth creation for EU citizens by making the bloc’s capital markets more competitive with those of the US.
The US stock market is worth approximately $62 trillion, or 48% of the global equity market, while the EU stock market’s cumulative value sits around $11 trillion, representing 9% of the global share, according to data from Visual Capitalist.
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