Long-term trust-building tactics are powering pig-butchering crypto scams, which have become one of the fastest-growing fraud threats in the digital asset space. Blockchain security firm CertiK reported $370.3 million in scam-related losses in January 2026 alone, with social engineering tactics accounting for the majority of stolen funds.
Unlike traditional phishing attacks that defraud victims quickly, pig-butchering scams involve methodical, long-term emotional manipulation before introducing fraudulent crypto investment opportunities. The term derives from the Chinese expression “Sha Zhu Pan,” which refers to nurturing a target like livestock before slaughter.
The scam process follows a carefully designed pattern across multiple stages. Perpetrators typically initiate contact through dating platforms, professional networks like LinkedIn, social media such as Instagram, messaging services like Telegram or unsolicited SMS messages. The introductory message appears accidental or casual to lower suspicion.
Over subsequent days or weeks, scammers nurture a bond with victims by sharing manufactured anecdotes, routine details and professional achievements.
Many impersonate successful digital asset traders and finance experts. Eventually, the conversation shifts to investing, with scammers claiming to know high-return crypto trading strategies or having access to insider knowledge on private investment platforms.
To build trust, scammers encourage victims to start with minimal investments. The fraudulent system displays swift “earnings” and occasionally allows small withdrawals to appear legitimate. As the victim’s trust increases, they are encouraged to invest larger amounts, with scammers sometimes advising victims to take bank loans, withdraw savings or borrow from friends.
When victims attempt to retrieve deposited funds, the system blocks access and demands additional charges. The scammers then vanish, often routing stolen assets through complex laundering chains involving multiple wallets, cross-chain bridges and over-the-counter brokers before cashing out.
The core feature that sets pig-butchering scams apart is their reliance on psychological and emotional exploitation. Fraudsters target vulnerabilities such as feelings of isolation, economic difficulties combined with hope for quick wealth, authority bias and trust in apparent evidence of success.
The extended buildup phase deepens the victim’s sense of attachment and loyalty.
Significant court outcomes demonstrate the scale of these crimes. In early 2026, Daren Li, a dual citizen of China and St. Kitts and Nevis, received a 20-year federal prison sentence in the United States for leading an extensive cryptocurrency fraud network. According to prosecutors, his actions defrauded victims of more than $73 million, with accomplices setting up fake websites and using front companies.
The January 2026 losses followed prominent crypto security breaches in 2025, particularly the Bybit exchange hack in February, which contributed to $1.5 billion in overall losses during that period. Of the $370.3 million stolen in January, phishing and social engineering tactics accounted for approximately $311 million, a category that frequently includes pig-butchering operations.
Several factors make cryptocurrency particularly vulnerable to these scams. Crypto transactions become permanent once confirmed, with no central authority able to reverse fund transfers.
Fraudsters often operate in networks spanning national borders, enabling seamless cross-border transfers independent of conventional finance. Scam websites have grown more sophisticated, featuring dynamic pricing, user dashboards and support functions like legitimate platforms.
Security agencies have strengthened efforts to combat these scams. Entities such as the US Secret Service and Homeland Security are enhancing joint efforts through anti-crime units focused on financial offenses. Law enforcement agencies in the US and Europe have begun freezing crypto wallets linked to pig-butchering rings, sometimes recovering partial funds through coordinated blockchain tracing efforts.
However, enforcement faces several challenges, including jurisdictional complexity, use of encrypted communications, scam compounds operating in loosely regulated regions and reports of forced labor in some Southeast Asian scam centers.
Investigative agencies are pursuing not only individual scammers but also laundering networks and shell companies facilitating fund movement.
Common warning signs of pig-butchering scams include unsolicited investment advice from online acquaintances, pressure to move conversations off mainstream apps, assurances of consistent high returns with low risk, requests to deposit crypto on unfamiliar platforms and demands for “tax” or “unlock” fees before withdrawals.
Some victims interact with scammers for several months before investing, making pig-butchering one of the longest-running and most emotionally manipulative forms of online financial fraud.
See also: What Makes a Crypto Project Worth Investing In? A Checklist
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