FinCEN Alert on Prevalent Virtual Currency Investment Scam Commonly Known as “Pig Butchering” (FIN-2023-Alert005)

See 31 U.S.C. § 5312(a)(2); 31 CFR § 1010.100(t).
United States Secret Service (USSS), “Cryptocurrency Investment Scams” (USSS Alert). These scams are also called
“Sha Zhu Pan,” a Chinese term that loosely translates to pig butchering. These scams may also be referred to, or begin as, “confidence scams” (or in certain cases “romance scams”) because fraudsters gain the confidence of their victims before eventually enticing them to make investments in fraudulent virtual currency trading platforms. See U.S. Department of Justice (DOJ), U.S. Attorney’s Office, Central District of California Press Release, “Justice Dept. Seizes Over $112M in Funds Linked to Cryptocurrency Investment Schemes, With Over Half Seized in Los Angeles Case” (Apr. 3, 2023).
Various types of virtual currency are known to be used in these scams, including prevalent cryptocurrencies and
stablecoins, such as bitcoin, ether, U.S. dollar tether, and TRX, among others. FinCEN’s definitions and consolidated guidance concerning virtual currency may be found at FinCEN, “Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies” (May 9, 2019).
While the majority of instances of this scam are perpetrated using virtual currency, scammers have increased their reliance on other ways to steal money, including electronic funds transfers, wire transfers, and foreign currency and dollar-gold contracts (Forex). See Commodity Futures Trading Commission (CFTC) Advisory, “Customer Advisory: Avoid
Forex, Precious Metals, and Digital Asset Romance Scams” (Feb. 7, 2022), and CFTC Press Release, “CFTC Charges California Resident and His Corporation with Fraud and Misappropriation in a Popular Romance Scam Involving Digital Asset Commodities and Forex” (Jun. 22, 2023). This alert focuses on the virtual currency instances of this scam.
See New Jersey Attorney General, Press Release, “Bureau of Securities Orders Three Website Operators to Stop
Offering Fraudulent Cryptocurrency Investment Opportunities, Urges NJ Residents to Beware of “Pig Butchering” Scams” (Feb. 3, 2023) (NJ AG Press Release). See also DOJ, “Eleven Defendants Arrested for Investment Fraud, Money Laundering and Unlicensed Money Transmitting Business Schemes” (Oct. 13, 2022), and DOJ, U.S. Attorney’s Office, District of New Jersey Press Release, “Middlesex County Man Charged with Laundering $2.1 Million Obtained from Internet-Related Frauds” (Oct. 11, 2022). FIN-2023-Alert005 September 8, 2023 FinCEN Alert on Prevalent Virtual Currency Investment Scam Commonly Known as “Pig Butchering” The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing this alert to U.S. financial institutions1 and the broader public to bring attention to a prominent virtual currency investment scam called “pig butchering.”2 These scams are referred to as “pig butchering” as they resemble the practice of fattening a hog before slaughter. The victims in this situation are referred to as “pigs” by the scammers who leverage fictitious identities, the guise of potential relationships, and elaborate storylines to “fatten up” the victim into believing they are in trusted partnerships. The scammers then refer to “butchering” or “slaughtering” the victim after victim assets are stolen, causing the victims financial and emotional harm. In many cases, the “butchering” phase involves convincing victims to invest in virtual currency,3 or in some cases, over-the-counter foreign exchange schemes4 —all with the intent of defrauding them of their investment.5 Pig butchering scams are largely perpetrated by criminal organizations based in Southeast Asia who use victims Suspicious Activity Report (SAR) Filing Request:
FinCEN requests that financial institutions reference this alert in SAR field 2 (Filing Institution Note to FinCEN) and the narrative by including the key term “FIN-2023- PIGBUTCHERING” and selecting “Fraud-Other” under SAR field 34(z) with the description “Pig Butchering.”

FinCEN Alert on Prevalent Virtual Currency Investment Scam Commonly Known as “Pig Butchering” (FIN-2023-Alert005)

Lineage: Superseded

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