I met my scammer through a dating app called Bumble, where he spent about six weeks courting me before I made my first investment into a cryptocurrency fraudulent website domain. I lost 152,000 USD. I will probably be spending the next 10 years to pay off the debts for completing the manipulative techniques that were used to get me to continue to invest in their platform. Karine fell victim to a scam that's growing like wildfire, one that can take months to fully execute. The scale of these crimes is just skyrocketing, and I'm specifically talking about pig butchering. Scammers built trust with their victims before gradually asking for money, which often takes form in cryptocurrencies. When we had Trad fi thefts and tradfi schemes, it was really difficult to get a victim to go liquidate literally everything they had. You might have gotten a random text from a stranger claiming they have the

wrong number, but they seem friendly enough and continue the conversation. Or you hit it off with someone on a dating app. They might eventually try to strike up a conversation about an investment strategy they have, but government agencies warn this could be the first step to luring you to give up your money. The FBI's latest internet crime report, published in April, shows that four and a half billion dollars lost to investment fraud were reported in 2023, and 86% of those fraud schemes mentioned cryptocurrencies. This is why the crypto sector, in my personal opinion, deserves a lot of the scrutiny. In the right hands, it can be used safely; in the wrong hands, it can carry out devastation that we cannot imagine. As these scams proliferate, investor losses are growing, but at the same time, Blockchain investigators are tracking down those stolen funds in the hopes of getting them back. You pig butchering smacks you in the face and makes you wonder, what

is this? What is this woman talking about in a way that terms like financial grooming don't pig butchering got its name due to the nature of how it's typically executed. The victim is first fattened up. Our scammers will spend up to four to five hours a day texting their victims. The victim will note that this scammer has become the relationship they always wish they had, holding their hand through every piece of it. They will direct our victims to take money out of their banks and invest it into what they believe is a cryptocurrency platform. The fraudulent website platform that they used was mimicked after a real cryptocurrency trading platform called Kraken futures, and the website was built in a way that it looked like a completely legitimate cryptocurrency trading platform. It had options spot our scammer already knows, because they've spent this extended time with our victim, that our victim has a 401, k, that they have college

funds for their kids, and this scam will not end until our scammer gets every last penny that our victim has. The rise of fake investment apps, especially legitimate-looking crypto apps, has forced big tech to respond. In April, Google sued two developers, alleging they created very convincing but fraudulent investment apps for the Google Play Store. The filing says at least 100,000 individual users downloaded the apps. They created fake companies and fake apps that enticed users to invest, and when doing so, that investment led to them losing their money. Victims of these scams are often dismissed as gullible, but pig butchering is built on socially engineered strategies that catch victims at an optimal place and time in their lives. We've seen law enforcement officers fall prey to these. We've seen lawyers. We've seen teachers, and not only do they know what to say, but they know how to stage

it and what works. By day three, they should be using Terms of Endearment and calling them honey. That 2023, internet crime report from the FBI found the vast majority of reported investment crime was tied to crypto. The underlying technology allows for peer-to-peer money transfers, making it a great tool for remittances. Transactions don't require middlemen, which scammers use to their advantage to move funds around the world. It moves quickly. It moves cheaply. All our victim has to do is push a button on their phone, and they've transferred hundreds of thousands of dollars. But the blockchain, the same thing that makes crypto so speedy and potentially so appealing to scammers, also makes it perfect for tracking down stolen funds. Chainalysis gave CNBC a behind-the-scenes look at its reactor tool, which tracks the flow of funds on a blockchain. We can see what tools and services are.

They are purchasing, reinvesting those profits, but we can also see them cashing out to clusters representing cryptocurrency businesses like in exchange, for instance. And this is a beautiful lead for us. Investigators and law enforcement, tracing funds down to an exchange can be key to an investigation, as the exchanges may have the information needed to identify criminals. Anti-money laundering and Bank Secrecy Act practices push crypto exchanges to report illicit activity to law enforcement. We work with law enforcement such as the FBI behind the scenes, both in terms of us helping to identify potential victims and engaging with them, as well as engaging for on asset recovery. In May, the tech against scams coalition was launched by crypto exchange Coinbase, in collaboration with other crypto businesses, as well as match group, which is the parent group of Tinder and hinge and the global anti-scam organization to work together in combating scams, including pig butchering, one of the key

realizations we had as we were all working independently and occasionally bilaterally. Other is we were really better off when we had perspective from all the different pieces and parts. But tracking down the stolen funds is one thing. Seizing them is another challenge entirely. With blockchain analytic companies. They're the metal detectors. They can see what's happening. They monitor the blockchain effectively. Companies like asset reality. We're the shovel. We're the ones that make it easy for governments to seize assets. Because right now, if a government agency wanted to seize an asset without us. They're having to pick from lots of different custodians. They're having to manage their own wallets. All of there's a big admin burden to doing that. There's a risk around doing that. Pig butchering cases involve numerous partnerships between the private and public sectors, all cooperating across multiple jurisdictions, some

with weaker regulations than others. The biggest challenge presented by crypto Asset Recovery is the almost guaranteed, like a multi-jurisdictional footprint. So when your case is in the $10,000.03 overseas, likely entities, probably six to nine to 12 months of information gathering, it just immediately falls into the we're sorry. We probably can't take this case forward category. What I found was that a lot of my funds actually routed to an exchange in Thailand, and I identified several addresses that were chain hocked from the original address, I deposited to a final address. All the investigative work that I can do on my end has been completed. It's now a matter of law enforcement taking action. A year ago, my team was successfully recovering maybe 25% of the victims that came to us, but then really only recovering maybe 10 to 15% of what they lost. On top of limited success at recovery,

legitimate recovery sources and law enforcement are contending with bad actors hoping to prey on those who are desperate to reclaim their life savings in the aftermath of a scam. And even if a victim is one of the few who are fortunate to be made whole, there is still another loss being dealt with. They lost their trusted partner on the same day this all happened. And so we see suicides. We see people checking themselves into psychiatric hospitals. We see people just unable to cope. Crypto scams are only getting more and more common. A Better Business Bureau report found that crypto and investment scams became the number one riskiest in 2023, with 80% of people targeted reporting lost funds. At the same time, these scams are getting ever more complex. We're normally dealing with scammers and helping law enforcement go after people. We've now seen very many cases where entirely AI-created identities, documentation, passports are being used. That's

not something we've had to tackle in the past, and this problem is expanding around the globe. According to the United Nations, the scammers are often migrants trafficked into Southeast Asia and forced to work under threats or use of violence. The FDIC says the best course of action to protect yourself from these scams is to remain skeptical, and if you do lose money, don't be too embarrassed to contact law enforcement. If victims can report to their local or federal authorities, that's the best way to have visibility on these instances, because the fact of the matter is, they're more than likely not the only victim. What I encourage folks to do, from a prevention standpoint, is don't make financial decisions alone, in isolation. Meanwhile, big tech and blockchain detectives are ramping up their responses to these crypto-focused scams. We want our users to know that they can trust us to not only sort of

proactively remove bad apps that are on our site, but once apps come through, they. That we're actually willing to go one step further and prevent those bad actors from doing it again. We started something called the crypto coalition, and we started with 85 members of active law enforcement back in October 2022. Today, we number more than 1800 members of active law enforcement that are focused on cryptocurrency investigations. We need to understand that this is how bad guys move money today, and we need to be ready in law enforcement to investigate those cases. We are not there yet. You.

How Americans Are Losing Their Life Savings To Crypto Fraud

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How Americans Are Losing Their Life Savings To Crypto Fraud

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