Crypto Markets Face Persistent Danger from ‘Pig Butchering’ Scams, Says Chainalysis

Crypto scammers are becoming increasingly sophisticated in their attempts to steal digital assets, according to a new report from blockchain analytics firm Chainalysis. The report, released on Thursday, reveals that scams remain the largest component of the multibillion-dollar crypto-crime sector in 2024. Although the financial impact is significant, Chainalysis research lead Eric Jardines noted that less than 1% of on-chain value is connected to illicit activities.

Scams Dominate, But Other Illicit Uses Are Growing

While scams are still the most prevalent type of crypto crime, other illegal activities are gaining momentum. The report highlights the use of cryptocurrency in child exploitation and other cybercrimes. Despite these concerning trends, scams continue to be the primary driver of illicit activity in the crypto world.

One particularly devastating type of scam is known as “pig butchering.” In these scams, fraudsters build trust with their victims through romantic gestures and other tactics, only to lure them into fake investment opportunities and steal their funds. The impact on individuals can be catastrophic, making it crucial for anyone with a crypto wallet to remain vigilant.

Stealing digital assets is only part of the scam; the challenge for scammers is converting those assets into usable funds. Centralized crypto exchanges have improved their efforts to crack down on illegal activity, forcing scammers to find alternative methods. One such method involves Huione Guarantee, an online marketplace managed by a Cambodian conglomerate.

Huione Guarantee allows users to buy and sell almost anything, including cryptocurrency. The platform operates as a facilitator, moving money without regulating who is receiving it or where it originates. According to Chainalysis, Huione Guarantee has processed $49 billion in crypto transactions since 2021. The company suspects that a portion of this activity is tied to scammers involved in pig butchering and money laundering schemes.

As crypto criminals evolve, the need for increased awareness and security measures within the digital asset space becomes more urgent.