The Commodity Futures Trading Commission (CFTC) recently formed two partnerships to provide investors with information about cryptocurrency relationship investment scams.
Specifically, CFTC’s Office of Customer Outreach and Education (OCEO) struck a partnership with the American Bankers Association Foundation and several other federal agencies to distribute an infographic to help consumers recognize a fraud scheme known as “pig butchering.”
Pig butchering involves unsolicited financial or investment advice from scammers through a “wrong number” text or a “like” on social media. Often, it is someone from an international criminal organization using a fake name and photo with the goal of starting a friendship or romantic relationship. From there, conversations turn to money and soon the “friend” wants you to trade crypto assets or foreign currency. Financial romance and grooming gangs stole more than $3.5 billion in 2023.
The one-page infographic illustrates the scam’s phases — from how victims are targeted and groomed to how the scam ends. It also provides warning signs and steps to take if a person has been victimized.
OCEO is also partnering with the U.S. Security and Exchange Commission’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association to develop an investor alert that gives customers an idea of how “pig butchering” scammers work their way into the minds and wallets of people.
It targets individuals who think they would never fall for this type of scam by giving them an introspective on how these fraudsters have perfected their criminal craft to entice even the savviest investors.
“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,” Office of Customer Education and Outreach Director Melanie Devoe said. “These partnerships focus on a relationship confidence fraud the perpetrators commonly refer to as ‘pig butchering,’ that is estimated to cost Americans billions each year.”
One way all investors can protect themselves is to not respond to unexpected or unsolicited text messages from unknown senders.