CFTC teams up with ABA and other federal agencies to shed light on ‘pig slaughter’ fraud

The Commodity Futures Trading Commission (CFTC) recently formed two partnerships to educate investors about cryptocurrency investment fraud.

©Shutterstock

The CFTC’s Office of Customer Outreach and Education (OCEO) has partnered with the American Bankers Association Foundation and several other federal agencies to distribute an infographic that will help consumers recognize a fraud known as “pig butchering.”

Pig grooming involves unsolicited financial or investment advice from scammers via a “wrong number” text message or a “like” on social media. Often, it’s someone from an international criminal organization using a fake name and photo with the goal of initiating a friendship or romance. From there, the conversation turns to money and soon the “friend” wants you to trade crypto assets or foreign currencies. Financial romance and grooming rings stole over $3.5 billion in 2023.

The one-page infographic illustrates the stages of the scam — from how victims are targeted and manipulated to how the scam ends. It also provides warning signs and steps you can take if someone has been a victim.

OCEO is also working with the U.S. Security and Exchange Commission’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association to develop an investor alert that will give customers a glimpse into how pig slaughter scammers are worming their way into people’s minds and wallets.

It targets people who think they would never fall for this type of scam, by giving them insight into how these scammers have perfected their criminal skills to entice even the most experienced investors.

“Working with federal and state regulators, as well as consumer advocacy groups and other organizations, helps spread the CFTC’s message of customer education and hopefully reach people before they are scammed,” said Office of Customer Education and Outreach Director Melanie Devoe. “These partnerships target a relationship trust fraud that perpetrators commonly refer to as ‘pig slaughter,’ and that is estimated to cost Americans billions each year.”

One way all investors can protect themselves is to not respond to unexpected or unsolicited text messages from unknown senders.