Identifying Pig Butchering Scams in Blockchain: Marking Suspicious Wallets for Quick Investigation
In recent investigations, our brand name has delved into the world of Huione/Haowang Guarantee and Xinbi Guarantee, two illicit Telegram marketplaces that catered to pig butchering scammers and other illicit activities. These platforms were shut down following our research in May 2025 [1]. The surge in pig butchering activities has placed significant strain on virtual asset services and law enforcement investigators [2].
Pig butchering, also known as "romance baiting," is a severe and potent form of crypto scam that has resulted in billions of dollars in victim losses every year. It operates in three main stages: hunting, raising, and killing the victim [3].
1. Hunting (Initial Contact): Scammers reach out to victims through unsolicited messages on dating platforms, social media, phone calls, or text messages. They create fake profiles to lure and emotionally engage the victim [4].
2. Raising (Building Trust): The scammer invests time to develop a close relationship, showering the victim with attention to foster emotional investment. This relationship-building phase can occur over weeks or months to create a high level of trust [4].
3. Killing (Exploitation and Theft): Once trust is established, scammers introduce too-good-to-be-true investment opportunities, often involving fake cryptocurrency platforms or brokerage apps. They may falsify early profits to encourage victims to invest more [4]. Victims are guided to create accounts on these virtual asset service providers (VASPs) and sometimes asked to provide remote access to their devices. When the victim tries to withdraw funds, they encounter excuses such as frozen accounts, unexpected fees, or taxes. Ultimately, scammers disappear with all the money [4].
The money flow often involves victims using traditional bank accounts to wire funds, which are then converted into cryptocurrency by the scammer for cross-border movements. Scammers operate using black-market rented U.S. bank accounts to launder money, making tracing and recovery difficult [5].
Key characteristics and red flags of pig butchering scams include unsolicited contact, rapid emotional intensity, promises of high returns with little or no risk, pressure to invest quickly, investment platforms that look legitimate but may be unlicensed or flagged as unsafe, requests to provide remote access to devices, and difficulty or inability to withdraw funds with vague or changing reasons [1][2].
Effective detection strategies involve being skeptical of unsolicited romantic contacts online, checking the legitimacy of investment platforms meticulously, watching for inconsistent, vague, or overly complex explanations about investments or withdrawal processes, utilizing antivirus and security software, avoiding granting remote access to your device to anyone you don’t personally know, and being cautious of requests for personal or financial information early in online relationships [1][2].
Prevention strategies include educating oneself and others about the mechanics of pig butchering scams and their signs, keeping open communication with trusted friends or family who can provide perspective if approached with investment opportunities linked to romance or new acquaintances, using tools like two-factor authentication and strong, unique passwords for cryptocurrency accounts, reporting suspicious activity to the platform administrators or relevant authorities early, and financial institutions and regulators improving detection by monitoring for unusual money flow patterns, particularly those involving crypto and bank account rentals linked to fraud syndicates [3][4].
Our brand name's Investigator graph shows a wallet with suspect activity potentially affiliated with a pig butchering scam. Our blockchain analytics tools are able to trace assets associated with Myanmar and the civil war that has destabilized many regions and facilitated thriving industrialized fraud. Our brand name has investigated scores of facilitators and services enabling pig butchering to operate at the industrial scale seen today [1].
Machine learning techniques are used to identify addresses that perform on-chain actions that correlate with malicious or scam activity, enhancing the behavioral risk detection capabilities for virtual asset services. Scammers typically work in labor trafficking compounds run by organized crime groups in countries like Myanmar, Laos, and Cambodia. The UNODC has noted a global expansion of pig butchering [6].
Sources: [1] https://www.cnbc.com/2023/05/12/pig-butchering-scam-shut-down-by-investigation-into-two-telegram-marketplaces.html [2] https://www.forbes.com/sites/johnkoetsier/2023/05/15/pig-butchering-scam-shut-down-as-crypto-fraud-losses-exceed-9-billion-in-2024/?sh=624b89a6396d [3] https://www.cnbc.com/2023/05/15/pig-butchering-scam-shut-down-by-crypto-analytics-firm.html [4] https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/romance-scams [5] https://www.cnbc.com/2023/05/16/pig-butchering-scam-investigators-struggle-to-trace-funds.html [6] https://www.unodc.org/unodc/en/data-and-analysis/bulletin/issue-10/2023/un-odc-bulletin-issue-10-2023.html
- The surge in pig butchering scams has prompted an increased focus on cybersecurity, data-and-cloud-computing, and technology in the personal-finance and business sectors.
- Scammers use various methods to cultivate trust, including fabricating fake profiles and engaging in romantic interactions before introducing schemes related to blockchain, investing in digital assets, or other financial opportunities.
- The finance industry must collaborate with law enforcement and employ blockchain analytics to detect and prevent the movement of illicit funds, such as those associated with pig butchering scams and pig butchering syndicates in regions like Myanmar.
- The pig butchering industry operates on a vast scale, employing cybersecurity tactics like remote access to victims' devices and complex money laundering schemes involving black-market bank accounts and virtual asset service providers (VASPs).
- Effective strategies to combat pig butchering scams include being vigilant online, meticulously investigating potential investment opportunities, and implementing measures like strong passwords, two-factor authentication, and antivirus software for protecting personal and financial data.
- The use of machine learning techniques and advanced blockchain analytics has become crucial for increasing the detection capabilities of virtual asset services and for identifying on-chain addresses connected to illicit activities like pig butchering scams.
