Alabama authorities have reclaimed $125,000 in cryptocurrency from sophisticated romance scammers who defrauded victims of nearly $580,000 through elaborate “pig butchering” schemes that left some residents financially devastated.
Key Takeaways
- Two Alabama residents lost nearly $580,000 in sophisticated “pig butchering” crypto scams, with authorities recovering just over $125,000 of the stolen funds.
- Victims were targeted through dating apps like Bumble and messaging platforms like WhatsApp, with scammers posing as cryptocurrency experts or creating fake investment platforms.
- The Etowah County victim lost approximately $395,000 to scammers who created a fake platform falsely associated with Charles Schwab, while a Baldwin County victim lost $185,000.
- Cryptocurrency fraud is rapidly growing, with pig butchering schemes accounting for 33.2% of all crypto scam revenue globally in 2024 and showing a 40% growth in revenue.
- Recovery of stolen cryptocurrency is extremely difficult due to the instant nature of transactions and the ability to quickly transfer funds across multiple wallets and overseas exchanges.
Alabama Victims Lose Nearly $580,000 in Sophisticated Crypto Scams
The Alabama Securities Commission (ASC) has successfully recovered over $125,000 in cryptocurrency for two Alabama residents who fell victim to elaborate “pig butchering” scams. These sophisticated fraud schemes, which have become increasingly prevalent, involve criminals building relationships with victims before convincing them to invest in fraudulent cryptocurrency platforms. The victims from Baldwin and Etowah counties were collectively defrauded of nearly $580,000, with authorities only able to recover a fraction of their losses despite extensive investigation efforts.
The Baldwin County victim lost approximately $185,000 after being deceived by a suspect who portrayed themselves as a cryptocurrency expert on dating and social media platforms. The ASC managed to recover $53,227.81 for this victim. Meanwhile, the Etowah County victim suffered even greater losses, approximately $395,000, after being convinced to invest in a fraudulent cryptocurrency trading platform falsely associated with Charles Schwab. For this victim, authorities recovered $73,927.68.
“The ASC continues to see an increase in cryptocurrency fraud, including ‘pig butchering.’ The ASC’s ultimate goal in cyber and crypto crimes is to capture the fraudster and recover funds. Most cyber crimes, however, originate overseas and the transactions are instant, making it nearly impossible to apprehend the criminals or recover funds. Crypto assets are particularly challenging to recover as most often the cryptocurrency is either immediately transferred to numerous different wallet addresses, ‘swapped’ for different cryptocurrencies and redistributed to different blockchains, and/or ultimately transferred to an overseas exchange and converted to fiat currency. In crypto frauds, our special agents devote long hours to an extremely tedious tracing process (in contrast to traditional financial analyses), but often aren’t able to recover funds. It’s extremely gratifying when we can pursue seizures on behalf of investors,” – ASC Director Amanda Senn
How “Pig Butchering” Scams Target Vulnerable Americans
These increasingly common “pig butchering” scams derive their name from the tactic of “fattening up” victims before financially “slaughtering” them. Fraudsters typically initiate contact through dating apps like Bumble or messaging platforms such as WhatsApp, gradually building trust with victims over weeks or months. After establishing rapport, scammers introduce victims to seemingly legitimate investment opportunities in cryptocurrency, often showcasing fake trading platforms with impressive but entirely fabricated returns to entice further investment.
In the case of the Baldwin County victim, the scammer posed as a cryptocurrency expert who convinced the victim to download a fraudulent cryptocurrency application and make substantial investments. The Etowah County victim was persuaded to invest in a fake trading platform that falsely claimed association with Charles Schwab, a well-established financial services company. These tactics exemplify how scammers exploit victims’ trust and lack of familiarity with cryptocurrency to execute their frauds.
“Alabama securities regulators have successfully recovered over $125,000 in crypto assets for two residents who were victims of ‘pig butchering’ romance scams,” stated Alabama securities regulators
Alarming Growth in Cryptocurrency Fraud
Cryptocurrency-related fraud has seen alarming growth worldwide, with at least $9.9 billion lost globally to crypto scams in 2024 alone. Pig butchering schemes account for a staggering 33.2% of all cryptocurrency scam revenue. Even more concerning is the nearly 40% growth in pig butchering revenue in 2024, accompanied by a 210% increase in the number of deposits year-over-year, indicating scammers are targeting more victims with smaller average deposits to expand their victim pools.
“ASC Director Amanda Senn noted that crypto-related fraud is on the rise and that many of these scams originate overseas.” – ASC Director Amanda Senn.
Federal authorities have increased enforcement actions against the infrastructure enabling these scams. In March, the U.S. Treasury took action by sanctioning a Philippine-based company and its Chinese administrator for facilitating pig butchering schemes. Despite these efforts, the anonymous and instant nature of cryptocurrency transactions makes recovering stolen funds extraordinarily difficult. The ASC emphasizes that victims should report scams immediately to maximize the chances of recovering any portion of their losses.
