TLDR
- CFTC partnered with federal and private agencies to combat crypto scams
- Focus is on “pig butchering” scams that cost Americans billions annually
- American Bankers Association Foundation will distribute infographics on scam detection
- SEC and other agencies will issue investor alerts on pig butchering scams
- Partnerships aim to educate investors before they fall victim to scams
The Commodity Futures Trading Commission (CFTC) has announced new partnerships with federal and private organizations to combat the growing threat of cryptocurrency scams, particularly the so-called “pig butchering” schemes.
This initiative comes in response to a surge in digital asset-related fraud that has cost Americans billions of dollars annually.
The CFTC’s Office of Customer Outreach and Education (OCOE) is collaborating with the American Bankers Association Foundation and the Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy.
These partnerships aim to educate investors and consumers about the risks associated with crypto investment scams and provide tools to identify potential fraudulent activities.
Pig butchering scams, a term used by perpetrators, involve criminals building fake romantic relationships with victims through social media platforms.
Scammers then exploit this trust to lure victims into fraudulent cryptocurrency investments. The CFTC reports that these schemes have become increasingly sophisticated, targeting even experienced investors.
As part of the initiative, the American Bankers Association Foundation will distribute an infographic detailing how pig butchering scams operate.
This visual guide will illustrate the tactics used by scammers, from initial contact to fund extraction, helping potential victims recognize warning signs. The SEC and other regulatory agencies will issue investor alerts to further raise awareness about these fraudulent practices.
CFTC OCOE Director Melanie Devoe emphasized the importance of these partnerships, stating,
“Partnering with federal and state regulators as well as consumer protection groups and other organizations helps spread the CFTC’s customer education message and hopefully reaches people before they can get scammed.”
The collaborative effort includes participation from various federal agencies such as the Financial Industry Regulatory Authority (FINRA), the Department of Homeland Security, the Secret Service, the FBI, and the IRS.
This multi-agency approach underscores the severity of the threat posed by crypto scams and the government’s commitment to protecting consumers.
Recent data from the FBI indicates that Americans lost $5.6 billion to cryptocurrency fraud in 2023, marking a 45% increase from the previous year. Of this amount, over $215 million was attributed to romance scams, highlighting the effectiveness of the pig butchering tactic.
The CFTC advises that the best defense against these scams is to “stop the scam before it starts” by not responding to unsolicited messages from unknown senders.
The agency hopes that by providing clear, accessible information about how these scams work, potential victims will be better equipped to protect themselves.
This latest initiative builds on previous efforts by U.S. regulators to address cryptocurrency-related fraud. In July, the CFTC and the Justice Department’s computer crime team organized the first-ever conference focused on combating pig butchering scams.
The rise in crypto scams is not limited to relationship-based fraud. The Federal Trade Commission recently warned about an increase in scams involving cryptocurrency ATMs, with stolen funds increasing nearly tenfold since 2020.
These scams often target older adults, who are three times more likely to fall victim than younger individuals.
