When the Bitcoin scammers came for me

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Earlier this year, an astonishing money-making opportunity appeared on my phone. I had somehow been added to a cacophonous group chat filled with dozens of wealthy investors. For weeks, I watched as they shared photos of steak dinners and second homes, while also offering their buy-sell positions, their gains and losses. Keita, a man with a number from North Florida, complained about having to hire laborers to clean up his yard. Anthony from New York posted while reading his kids a bedtime story. Jefferson Ogwa talked about making smart trades.

The smartest trades came from a man named Mike Wilson, who, along with his assistant at Morgan Stanley, made order recommendations in the chat. When he did, people would flood the group with screenshots of their Wilson-directed wins and occasionally post their Wilson-advised losses. Wilson’s assistant helped people make their trades and encouraged them to stay steadfast through the inevitable market swings. “The starting capital is relatively low for those interested in participating,” she wrote. “Stay tuned.”

I kept listening. Since I hadn’t made any trades (as a reporter, I don’t actively invest in anything), I chimed in anyway: “I can’t wait for the markets to open on Monday.” At that point, I was added to other trading groups and my phone started pinging with texts on iMessage and WhatsApp. “This is Marie, do you have time to talk today?” “Are you interested?” From there, it escalated, slowly, slowly. Would I like to chat? What were my investment goals? How was my week? Is there anything I’m looking forward to?

I got caught up in a textbook example of a pig slaughter scam, the hallmark of which, apart from its hideous name, is a certain laid-back charm. No rush. No blunt demand for money. Just a bunch of engaging and non-threatening messages that inevitably led to an attempt to get me to trade bitcoin on a special platform or send it to an anonymous address.

That was clear to me from the start. I had been randomly (?) added to a Morgan Stanley-affiliated (?), WhatsApp-based (?) investment group filled with hundreds of people posting in stilted English about eating “salmon fruit salad” (?) and “spaghetti and mashed potatoes” (you know, the one) while trading bitcoin (come on!). The precision of everyone’s punctuation, the Juche-style paeans to Mike Wilson’s greatness, the bragging about the steady profits being made on the world’s most notoriously volatile asset—it was all too strange.

Read: Is crypto dead?

But I can easily see how someone who doesn’t know much about bitcoin or fraud could fall for it. So much effort was put into making me feel comfortable, part of a special community. I was genuinely looking forward to reading the group chat in the evening: Jason Dunlavey going on and on about his Nepalese knives, Jody Mierop having brunch at Sarabeth’s. “Going to sleep and hoping I wake up refreshed,” Lopez said. “I imagined myself crawling under the covers and everything being nice and warm,” Kevin Davis added. “Sleep tight and don’t let the bedbugs bite you!” Ahmet Kayci chimed in. Thanks, internet stranger!

Moreover, the scam had some credibility. Mike Wilson is an actual investor. A famous investor. He is the chief investment officer of Morgan Stanley. The name of his assistant in the group chat is the name of an actual Morgan Stanley employee, who is easily found on LinkedIn, although the person in question actually works in internal operations. A Morgan Stanley spokesperson confirmed that neither of them texted me: Morgan Stanley does not offer direct bitcoin trading or advise clients via WhatsApp.

In addition to the real and realistic people who seemed to be participating, the bitcoin prices posted in the group chat were up to date and the order forms looked convincingly professional. No one asked me for anything for weeks. It was sometimes difficult to tell what someone wanted, let alone how they were going to get it.

Still, like millions of Americans, I was being fattened up like a pig for slaughter. The FBI reports that cyber investment fraud will cost Americans $4.6 billion in 2023, up 38 percent from the year before and 1,700 percent from the previous five years. That’s more than ransomware fraud, fake tech support fraud, web extortion, phishing attacks, malware breaches, and non-payment and non-delivery fraud combined. And that’s an underestimation, since it only includes law enforcement complaints; most people don’t bother filing a police report in an attempt to recover their bitcoin, knowing it’s hopeless. John M. Griffin and Kevin Mei of the University of Texas at Austin recently estimated that crypto scammers engaged in pig slaughter have raked in $75 billion since the beginning of 2020.

The problem has gotten so bad that the Federal Trade Commission issued a bulletin earlier this year titled, bluntly, “What to Do When Your Online Love Interest Offers to Teach You How to Invest Your Money.” How did we get here? Gradually and then suddenly, like going bankrupt or falling in love. A confluence of financial and technological factors has made the explosion in pig slaughter possible. The question now is what authorities can do to protect the curious, lonely American public, thirsty for companionship and hungry for money.

Read: How crypto disappeared into thin air

The rise of dating apps, social media platforms and instant messaging services is one of the most significant changes. Scammers pose as young women to seduce bored older men, as college girls to cheer up college girls, and as respectable professionals to seduce respectable professionals. They tailor their messages to their recipients, whether that’s acting cute on Bumble or chatting about work-life balance on LinkedIn.

None of this is new; romance scams have been around in one form or another since time immemorial. But sophisticated criminals have made them more convincing: by slowing the burn; by offering to help people invest, rather than asking them for money outright. And social media has given them absurd scale and reach.

The biggest factor behind the rise of the pig slaughter fraud is the rise of crypto, the $2 trillion speculative asset class and the money transmission infrastructure that goes with it. Bitcoin and similar cryptocurrencies aren’t exactly untraceable and anonymous. But crypto markets are barely regulated, with many operating overseas or violating the restrictions of domestic law. Don’t believe me. Take it from the chief compliance officer of mega-exchange Binance, as quoted by trial lawyers at the Securities and Exchange Commission: “We operate as a fking unlicensed securities exchange in the U.S., bro.” Once purchased, cryptocurrencies can be sent to anyone, anywhere, and are typically impossible to recover.

“You could go to Wells Fargo and say, ‘Hey, I need to send $200,000 to this bank account,’” Griffin told me. “Wells Fargo would run that transaction through their anti-money laundering procedures. If it was a bank account in Thailand or Myanmar, that would probably raise some red flags of suspicious activity. They might block that transfer or ask you a bunch of questions.” But moving money from Wells Fargo to Coinbase to buy bitcoin wouldn’t raise such alarm bells. And at that point, Griffin said, “you’re one transaction away from losing your money.”

You might assume that the person ripping you off is a hacker from Malta or a scary, bitcoin-obsessed teenager. In fact, the person is probably a victim themselves. I had no way to trace the source of the scheme that targeted me. But the United Nations has warned that many of these pig slaughterers are being forced into the practice by gangs. They are being kidnapped and held in labor camps in Southeast Asia.

Since the start of the pandemic, criminal groups have been posting fake job offers on chat apps and elsewhere, luring multilingual, computer-savvy workers and then ordering them to lure and defraud foreigners, one text at a time. “Hundreds of thousands of people from across the region and beyond have been forced into online crime,” a report by the Office of the UN High Commissioner for Human Rights found.

Investigative journalist Zeke Faux described this development in his book on crypto, Number up. After scamming himself out of $100 in Tether, a stablecoin, Faux traced the flow of money from such schemes to digital sweatshops in Cambodia and Vietnam. There, trafficked people “describe abuses worse than I could have imagined,” he writes. “Workers who didn’t meet quotas for scams were assaulted, starved, forced to beat each other, or sold from compound to compound. One said he saw people forcibly injected with methamphetamine to increase their productivity. And several said they saw workers murdered, with the deaths dismissed as suicides.”

The pig slaughter must stop, for the millions of victims who are being scammed and for the hundreds of thousands of victims who are being forced to scam them. Crypto companies need to act like other financial companies, abide by basic know-your-customer rules and collect tax information for the authorities. Treating the problem as a large-scale money laundering, rather than a person-to-person scheme, may be the best way to protect consumers.

In the meantime, publicizing the sweet, slow, talkative methods of these thieves should help, if only marginally. Texts from today’s Mike Wilsons are far more credible than “Dear Sir/Madam” emails from Nigerian princes of yore. They’re also far more entertaining. No one should be fooled. If you really want to invest in bitcoin, you’re better off going it alone.