'Pig butchering' scams caused a record loss of $3.6 billion in 2024, surpassing other forms of cryptocurrency fraud, according to a report by Cyvers.
2024 witnessed a concerning rise of the 'pig butchering' scam in the cryptocurrency sector. According to the latest report from Web3 security company Cyvers, this form of scam caused losses of up to $3.6 billion, surpassing all other forms of cryptocurrency fraud and becoming the top threat of the year. This figure highlights the severity of the issue, especially when compared to the FBI's estimate of $3.96 billion in losses due to similar scams in 2023.
'Pig butchering' is a sophisticated scam method in which the scammer builds a fake relationship with the victim through dating apps or social media over an extended period, establishing trust before enticing them to invest in fake cryptocurrency platforms.
Cyvers' report tracked over 150,000 addresses and 800,000 transactions related to 'pig butchering' scams, illustrating the widespread nature of this problem. The Ethereum (ETH) blockchain was identified as the main network used by criminals to transfer illicit funds.
Sophisticated methods and severe consequences
The rise of 'pig butchering' scams reflects the increasing sophistication of cybercriminals. They invest time and effort to create fake profiles, nurturing relationships with victims over weeks or even months, making victims trust them and easily persuaded to invest in fake cryptocurrency projects.
These fake platforms are often professionally designed, resembling legitimate exchanges or investment projects, making it difficult for victims to recognize the scam nature. As a result, many victims have lost their entire savings.
In addition to the increase of 'pig butchering', Cyvers' report also noted that the total losses caused by cybercrime in 2024 amounted to $2.3 billion across 165 incidents, a 40% increase from the previous year's incidents.
However, the total losses remain 37% lower than in 2022. Ethereum continues to be the primary target, with access control breaches causing $1.9 billion in damages across 67 incidents. Smart contract vulnerabilities resulted in losses of $456.8 million, while a single address poisoning incident led to $68.7 million being stolen.
Although the cybersecurity situation remains challenging, anti-fraud efforts have recovered $1.3 billion in the past year, largely thanks to blockchain investigators like ZachXBT and bug bounty programs.
Q1/2024 recorded the highest number of incidents with 53 cases, but the largest financial losses occurred in Q3, totaling $760 million. Notable incidents include a $305 million breach at DMM Exchange due to a leaked private key, a $235 million hack targeting WazirX through a multi-signature wallet vulnerability, and a $52 million loss at BingX due to a hot wallet attack. Notably, access control incidents, although only accounting for 41.6% of reported cases, caused up to 81% of total losses.
In light of this situation, Cyvers recommends enhancing user education about the risks associated with cryptocurrencies and online scams. Improving wallet security measures, applying stricter regulations on cryptocurrency platforms, along with real-time monitoring and advanced threat detection systems are also proposed as important solutions to mitigate future losses.
