The surge in popularity of blockchain and digital assets has drawn attention from different quarters, including scammers. Binance, a renowned crypto exchange, divulged an alarming increment in reported ‘pig butchering’ scams over the previous year. This disconcerting proliferation of scams within the crypto sphere mirrors an overall rise in investment scams across all financial industries.
The grave losses from investment fraud soared from a hefty $1.45 billion in 2021 to an astonishing $3.31 billion in 2022. This massive leap marks a 127% increase, a large segment of which is attributable to crypto fraud. The tally of crypto investment fraud cases took an upward trajectory, rising from $907 million in 2021 to $2.57 billion in 2022, an increase of 183%, as recorded by Binance.
This escalating trend of crypto-related scams is mainly tied to the wave of novice investors navigating the market. The scammers prey on these greenhorns, capitalizing on their unfamiliarity with new asset classes. Yet, it’s imperative to shelve the assumption that only novices fall victim. Experienced investors and well-informed crypto users aren’t immune either.
On a slightly optimistic note, the advent of blockchain technology makes it simpler to combat these scams. The public and traceable nature of blockchain transactions renders it an influential tool for collecting evidence and initiating actions against scammers.
‘Pig butchering’ scams typically involve the swindlers ‘feeding’ their victims with lofty promises of high returns to gain their trust and eventually ‘butchering’ them by swindling their investments. The victims are usually drawn into investing on a sham platform, enticed by the spectacle of initial ‘profits’. Ultimately, scammers vanish after siphoning off all their money.
To curtail falling prey, people must imbibe certain self-protective measures such as thorough research, assessing credibility, opting for official channels, not precipitating decisions, and maintaining a degree of skepticism towards unsolicited offers. And again, in the recent past, Binance joined forces with the US Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in addressing a crypto-related pig butchering case, successfully reclaiming $112 million.
Lastly, it’s crucial to comprehend that crypto space, like any other investment avenue, isn’t devoid of perils. However, equipped with the right knowledge and a cautious approach, investors can potentially shield themselves from becoming victims of these despicable acts.
Source: Cryptonews
