Coinbase Raises Alarm on ‘Pig Butchering’ Crypto Investment Scams

American cryptocurrency exchange, Coinbase, has raised concern over an increase in the number of romance-investment scams called ‘pig butchering’ or Sha zu pan'.

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This type of scam occurs when a scammer sources victims through dating apps and social media as well as builds “trust with their victim, sometimes over a long time period of weeks or months.”

The Coinbase Global Investigations, Trust & Safety and Threat Intelligence Teams expressed worry on the rising popularity of this scam in a security PSA released on Thursday.

Coinbase explained: Recently, a noteworthy increase in scams purporting to be foreign exchanges or crypto trading platforms that are spread by scammers who use dating apps to lure victims.

“While investment scams and romance scams are not unique to the cryptocurrency ecosystem, the irreversible nature of cryptocurrency transactions can make these scams devastating.”

However, the publicly-traded company noted that it works closely with law enforcement actors across the world to protect its customers from different forms of targeted cyber attacks.

Modus Operandi

For this nature of scam,Coinbase explained that fraudsters typically claim that they have received enormous financial gains from a cryptocurrency investment and convince their victims to invest in such schemes.

At other times, the scam might come in the form of offering to teach victims how to trade successfully.

The distributed company explained: Victims are directed to visit a fraudulent website that often looks like a legitimate trading platformand coached to deposit funds into an account that is controlled by the scammer.

Some victims even receive a small amount of funds that are claimed to be ‘returns’ on their investment to entice them to invest even larger sums.

“When the victim tries to withdraw funds from the site, they are then told they owe a tax payment or service fee before their funds will be released in an effort to further extort them for money.”

Coinbase noted that its teams identify and add addresses associated with scams to its products blocklists to shield its customers.

The exchange urged its users to be vigilant against this type of scam.