Chainalysis says pig-butchering scams pose US security risk

Chainalysis is warning that pig-butchering crypto scams have escalated into a national security issue, pointing to a near 40% year-over-year rise in 2024, while overall crypto scam revenue reached at least $9.9 billion.

The assessment was outlined by Andrew Fierman, head of national security intelligence at Chainalysis, during a podcast conversation with former prosecutor Erin West, who leads the nonprofit Operation Shamrock.

The networks described are transnational and rooted in Southeast Asia. Trafficked workers in large compounds build online relationships with targets, direct them to fake trading platforms and empty the accounts once deposits grow.

Fierman pointed to blockchain transparency as a way to curb the flows, noting that one of the key advantages of using blockchain in this context is the potential to disrupt such activity if it is implemented correctly, since its transparency can enable intervention at the cash-out stage.

West urged broader readiness across the financial ecosystem, stressing that anyone involved with money in any way is part of this effort and must be prepared to understand both the threat and the gravity of what is happening at the national security level.

Once this happens to you, you will be put on a list […] and you are even more likely to get hit up again,

she noted.

Chainalysis outlines common red flags reported by victims: sudden declarations of affection without in-person contact, refusal to share verifiable details, requests for emergency funds, and pressure to join “risk-free” investments backed by screenshots of outsized profits.

Victims are often pushed off mainstream apps and into controlled portals where balances and gains are fabricated.

US enforcement is expanding in response. On Nov. 12, the Department of Justice announced a Scam Center Strike Force to pursue Chinese-linked transnational criminal organizations behind crypto investment fraud in Southeast Asia.

Authorities in the Asia-Pacific region have taken similar steps. In a case detailed on Aug. 27, APAC law enforcement, working with Chainalysis, OKX, Tether and Binance, froze nearly $47 million in pig-butchering funds. The approach focuses on disrupting on-ramps and off-ramps, seizing assets and using sanctions.