Shift in Crypto Scams

In the past year, crypto criminals have transitioned from Ponzi schemes to more targeted scams like “pig butchering,” according to a new Chainalysis report.

“There is a macro trend consistent with the continued pivot of scammers from elaborate Ponzi schemes that cast a wide net to more targeted campaigns like pig butchering or address poisoning, driven in part by increasing enforcement efforts and stablecoin issuers blacklisting scam addresses,” stated Friday’s Chainalysis mid-year update part two.

What is Pig Butchering?

Pig butchering scams earn their name from the method by which scammers “fatten up” their victims to extract maximum value. This typically involves cultivating a romantic relationship over time through text messages or dating apps, ultimately persuading the victim to invest in a fraudulent scheme. Disturbingly, many scammers orchestrating these conversations are also victims—kidnapped and trafficked to Southeast Asia and forced to work in labor camps to carry out these scams.

Prevalence of Pig Butchering Scams

One of the largest cryptocurrency wallets linked to scamming is tied to KK Park, one of the world’s most notorious pig butchering operations, according to the recent Chainalysis report. Located in Myanmar, KK Park has become a significant hub for internet fraud and human trafficking.

“The KK Park wallet was first observed on-chain in 2022, and scamming operations using this address continue to generate significant revenue, netting over $100 million this year. These funds likely come from scam victims and ransom payments made by families attempting to rescue trafficked relatives,” the report noted.

A 2024 investigation by Deutsche Welle revealed that workers at KK Park endure lengthy workdays and are monitored, tortured, and threatened with murder if they attempt to escape.

Chainalysis also highlighted how scam operations from KK Park adapt their practices, frequently acquiring seasoned profiles from platforms like Facebook, Tinder, and Match.com from China-based services for their campaigns.