What may seem like an innocuous friendly message from a stranger is leading some to financial ruin.

Known as “pig butchering,” these scams lure victims into trusting relationships, only to exploit them through fake crypto investments.

When victims try to withdraw their fictitious profits, they’re met with demands for exorbitant “taxes” or penalties.

For years, recovering money lost to such scams was nearly impossible — but this is slowly beginning to change.

In one recent case, Scott Simmons, a Wisconsin detective helped a victim who lost $551,000 to one of these schemes.

The scam began with social media messages that developed into a seemingly genuine relationship. The scammers introduced the victim to what appeared to be a legitimate cryptocurrency platform, showing fake account screenshots with growing profits.

The victim transferred funds in small amounts at first, then larger sums in USD Coin across 15 transactions. It wasn’t until they tried to withdraw their “profits” that the victim saw through the charade.

Simons’ investigation uncovered that the funds had been laundered through multiple addresses before landing in a single wallet holding $4.6 million in stolen assets.

“This was a breakthrough,” Simons said.

Using blockchain analytics tools and warrants, federal agencies managed to freeze over $800,000, which will be returned to victims.

“This case is not the norm,” Simons admitted. “Many victims of crypto scams never see their money again, simply because law enforcement doesn’t have the tools or training to handle these cases effectively.”

Simons’ success echoes a similar case from North Carolina earlier this year, where federal agents seized nearly $5 million in Tether linked to pig butchering scams.

Recoveries like these remain rare, however.

“Americans are losing their life’s savings to investment frauds as funds are being rapidly transferred to crypto accounts overseas,” said US Attorney Michael Easley, whose office led the North Carolina case.

“We are clawing back every dollar we can, even when criminals are located abroad.”

Crypto market movers

  • Bitcoin is up 0.1% over the past 24 hours to $101,740.

  • Ethereum is down 2% to $3,840.

What we’re reading

  • MicroStrategy joins Nasdaq-100 ranks, but its stay could get cut short – DL News

  • How Warren’s Power on Senate Banking Is Backfiring in Caroline Crenshaw Confirmation — Unchained

  • Musician Drake’s X account seemingly hacked, used to promote Solana memecoin — The Block

  • Polygon DAO Weighs $1.3B Stablecoin Deployment to Generate $70M Annual Yield — CoinDesk

  • Crypto ‘debanking’ is a raging issue in Washington — is the practice real? — DL News

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.