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The FBI Internet Complaint Center (IC3) recently celebrated its 25th anniversary, issuing its annual report for 2025. Twenty-five years ago, IC3 received 49,711 complaints while the total number of complaints received in 2025 reached 1,008,597. In 2001 the total losses attributed to cybercrime were $17.8 million. This year’s report highlighted losses of $20.877 billion. Losses due to cybercrime have particularly accelerated in the last ten years with investment related fraud being the largest category of scams.
Investment scams have always been with us, but according to the IC3 report they accounted for $8,648,617,756 of losses last year which was double the amount of the previous year and almost triple the amount of the next highest category of scams. Cryptocurrency fraud accounted for 72% of all investment scams.
Cryptocurrency investment scams are often tied to romance scams referred to as “pig butchering.” Scammers initially contact their victims on dating or social media apps and pretend to develop a close relationship. After a while the scammer informs the targeted victim that he or she is making a lot of money investing in cryptocurrencies and suggests the victim download and use a cryptocurrency app used by the scammer. The victims are then lured into investing more and more money by what appears to be both dramatic increases in the value of their account and their ability to withdraw some of their profits. However, once the victim has been persuaded to invest larger sums of money, the scammers steal the money, and the victim is left with nothing.
The apps used in the pig butchering scam may appear to be legitimate, but they are not found on official app platforms such as Google Play or the Apple App Store.
This scam originated in China in 2019 and is called sha zhu pan or pig butchering in English. The name is derived from the practice of scammers taking their time and gradually luring in victims, "fattening them up" by convincing them to continually "invest" more money and then stealing all the money.
In its 2024 Crypto Crime Report the Blockchain Data Platform Chainalysis reports that pig butchering romance scams increased 8500% between 2020 and 2024.
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You might be surprised to learn that typically the victims of this scam are highly educated people who are targeted because they may have recently gone through a divorce or some other personal difficulty. Most victims are anywhere from their mid-30s to their early 50s with the loss per victim averaging $121.926.
In 2024 Meta announced it had taken down 2 million Facebook, Instagram, WhatsApp and Messenger accounts used for pig butchering scams with most of these accounts based in Myanmar, Laos, the UAE, the Philippines and Cambodia.
Bernie Madoff who stole 50 billion dollars from unsuspecting victims may be the last person from whom you would accept investing advice, but in fact, his advice, as contained in a 2013 jailhouse interview Madoff gave to the Wall Street Journal is helpful to people hoping to avoid the fate of Madoff's many victims. With great "chutzpah," Madoff blamed his victims for their losses. He said that his investors were "sophisticated people" who should have known better. "People asked me all the time, how did I do it. And I refused to tell them, and they still invested. Things have to make sense to you. You should ask good questions." About this he is correct. No one should ever invest in anything that they do not totally understand.
The bottom line is that Bernie Madoff was right about one thing. No one should ever invest in anything without totally understanding the investment and the inherent risks. If you understand cryptocurrencies and still wish to invest in them, that is fine, but all investment decisions should be made only after being properly informed. Cryptocurrency scams quite often involve complicated language and investment terms that are purposefully unclear to confuse potential investors from understanding the real facts. You may want to check out the SEC’s investor education website for information about investments in general and cryptocurrency investments in particular.
You should also investigate the person offering to sell you the investment with FINRA’s Central Registration Depository. This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her. You can also check with your own state's securities regulation office for similar information. Many investment advisers will not be required to register with the SEC but are required to register with your individual state securities regulators. You can find your state's agency by going to the website of the North American Securities Administrators Association
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