CFTC announces joint effort to combat crypto pig butchering scams

The Commodity Futures Trading Commission (CFTC) has launched a collaborative initiative to combat the rising threat of cryptocurrency “pig butchering” scams.

CFTC’s Office of Customer Outreach and Education (OCEO) is leading the initiative. CFTC has also partnered up with various federal agencies and financial industry groups to educate consumers. These include the American Bankers Association Foundation and other regulatory bodies.

OCEO’s director emphasized the importance of the partnerships

“Collaborating with federal and state regulators, as well as consumer protection groups, helps amplify the CFTC’s educational message. Our goal is to reach potential victims before they fall prey to these scams,” Melanie Devoe, Director of the OCEO, emphasized.

As a part of this initiative, the CFTC has released a comprehensive infographic. The infographic breaks down the pattern of a “pig butchering” scam.

It shows the various stages of the fraud, from initial targeting and grooming of victims to the final steps where scammers attempt to extract funds. It also provides crucial warning signs and guidance for those who may have already fallen victim to these scams.

CFTC cited that the criminals target individuals by using fake profiles. These scammers take their time and build connections with their targets. These scammers use fake phone numbers, rely on deepfake videos and also use artificial intelligence.

CFTC is also collaborating with the SEC’s FINRA

In addition to the infographic, the CFTC mentioned in the press release that it is collaborating with the SEC’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), and the North American Securities Administrators Association to develop a detailed investor alert.

This alert aims to provide a clear picture of how these scammers operate. It also highlights how these scammers target even savvy investors who might believe they’re immune to such schemes.

The CFTC stresses that the best defense is prevention. They advise individuals to be wary of unsolicited messages from unknown senders. They also advised reporting suspicious texts using their phone’s built-in reporting features.