CFTC Launches Partnerships to Combat Pig-to-Slaughter Scams
Date: 2024-09-13 Author: Henry Casey Categories: BUSINESS
The U.S. Commodity Futures Trading Commission (CFTC) announced on Sept. 11 that it has formed two new partnerships aimed at combating pig-to-slaughter scams across the United States.
The CFTC’s Office of Customer Engagement and Education (OCEO) launched these partnerships to protect potential victims from these increasingly damaging fraud schemes.
CFTC and Private Regulators Team Up to Combat Scams
The CFTC said it is partnering with the American Bankers Association Foundation and private regulators to distribute infographics designed to educate consumers about the risks and tactics of pig-to-slaughter scams.
Additionally, the CFTC is working with the SEC’s Office of Investor Education and Enforcement, the Financial Industry Regulatory Organization, and the North American Securities Administrators Association to create an investor alert.
The goal of the alert is to provide clear guidance on how pig-slaughtering scammers manipulate victims by gaining their trust before stealing their assets.
“Collaborating with federal and state regulators, as well as consumer advocacy groups and others, helps spread the CFTC’s message about the importance of consumer education and hopefully warns people before they fall victim to fraud,” said Melanie Deveau, director of the CFTC’s Office of Consumer Education.
“These partnerships focus on the trust-based fraud that criminals call ‘pig-slaughtering’, which costs Americans billions of dollars each year,” she added.
The Rise of Pig-to-Slaughter Scams
Pig-to-slaughter scams are becoming increasingly common, especially in the cryptocurrency sector, and can result in significant financial losses.
These scams occur when fraudsters gradually gain the trust of victims in order to trick them into giving up more money over time, much like fattening a pig before slaughter.
Earlier this year, Professor John Griffin of the University of Texas at Austin found that more than $75 billion was lost in such scams from January 2020 to February 2024, with the stolen funds funneled to global cryptocurrency exchanges.
“These criminal networks are huge and operate with near impunity,” Griffin told Time magazine.
According to Chainalysis’ Mid-2024 Crypto Crime Report, pig-to-slaughter scams generated more revenue than any other type of fraud this year.
The report also highlights that fraudsters in the blockchain sector are moving from traditional fraud methods to "pig to slaughter" schemes, making regulatory warnings and notifications even more important.
