Combating Pig Butchering Scams: How Crypto Platforms Can Enhance Security & User Trust

The 2024 Crypto Crime Report by Chainalysis reveals a concerning trend: pig butchering scams continue to grow, with criminals stealing billions from unsuspecting users. These scams, which involve building trust with victims before convincing them to invest in fraudulent schemes, have seen a year-over-year revenue increase, highlighting the urgent need for stronger security measures in the crypto industry.

For crypto platforms, this poses both a challenge and an opportunity. By implementing advanced fraud detection and prevention tools, exchanges, wallets, and DeFi projects can protect their users, enhance trust, and improve retention.

The Rising Threat of Pig Butchering Scams

According to the Chainalysis report, pig butchering scams—also known as "romance scams" or "crypto investment scams"—have evolved into one of the most financially devastating forms of crypto fraud. Here’s what the data shows:

• Scammers are earning more than ever – Despite increased awareness, these scams generated higher revenues in 2024 compared to previous years, indicating that criminals are refining their tactics.
• Victims are often targeted through social media and dating apps – fraudsters impersonate trustworthy individuals, building emotional connections before introducing fake investment opportunities.
• DeFi and cross-chain bridges are exploited – Scammers frequently move stolen funds through decentralised exchanges (DEXs) and mixers to obscure their trail, making recovery difficult.
• Long-term grooming increases losses – Unlike quick phishing attacks, pig butchering scams can last for weeks or months, resulting in victims losing significantly larger sums.

Key Takeaways: The Escalating Threat of Pig Butchering Scams

Pig butchering scams have evolved into highly sophisticated operations that combine psychological manipulation with technical expertise. Criminals no longer rely on crude phishing attempts but instead deploy systematic social engineering tactics across dating apps, social media, and professional networks. They employ psychological techniques like love bombing (overwhelming victims with affection), future faking (making false long-term promises), and gaslighting (undermining victims’ doubts) to build trust before introducing fraudulent investment schemes. Many of these operations are run by organised crime groups that maintain detailed playbooks, training programmes, and even call centres to maximise success rates.

On the technical front, scammers have developed remarkably convincing fake platforms, complete with fabricated trading histories, simulated withdrawals, and responsive customer support—sometimes even offering mobile apps through unofficial stores. Once funds are acquired, laundering follows a well-structured process: immediate conversion to stablecoins (primarily USDT), layering through DeFi protocols, and cross-chain hopping (e.g., Ethereum to Tron to mixers) to obscure the money trail. Some criminal enterprises even operate "scam-as-service" models, offering pre-built fake exchange platforms to less tech-savvy fraudsters in exchange for a cut of the profits.

The damage from these scams extends far beyond direct financial losses. Platforms that unknowingly process scam-related transactions face severe reputational harm—62% of victims blame the exchanges or wallets they used. Regulatory scrutiny is also intensifying, with authorities pressuring crypto businesses to implement stronger fraud detection measures. Meanwhile, the human toll is staggering: many victims suffer lasting psychological trauma, and the profits from these scams fuel further criminal expansion.

Traditional security measures often fail to detect pig butchering scams because they exploit behavioural rather than technical vulnerabilities. Transactions may appear legitimate—small initial deposits, seemingly voluntary transfers, and gradual increases in activity—making them difficult to flag using conventional fraud algorithms. Victims, emotionally manipulated into compliance, frequently disregard warnings or actively resist intervention. Additionally, jurisdictional challenges arise, as many scam operations are based in regions with weak enforcement.

However, the Chainalysis report highlights several promising intervention points. Behavioural red flags—such as sudden large stablecoin purchases by non-traders, unusual withdrawal address changes, or patterns of test transactions—can signal potential scams. Blockchain analytics can identify clustering of recipient addresses, recurring funding sources, or interactions with known fraudulent contracts. Proactive measures, such as delayed withdrawals for first-time large transactions or mandatory scam awareness tutorials for new users, could also disrupt these schemes before losses occur.

This multilayered threat demands an equally sophisticated response—one that combines real-time transaction monitoring, behavioural analysis, and user education. Platforms that adopt these strategies will not only protect their users but also safeguard their reputations and regulatory standing in an increasingly scrutinised industry.

How Crypto Platforms Can Fight Back

To safeguard users and maintain credibility, crypto businesses should:

• Integrate real-time transaction monitoring – Detect and block suspicious transfers before scams escalate.
• Enhance KYC/AML protocols – Identify and restrict fraudulent accounts early.
• Educate users – Provide clear warnings about common scam tactics.
• Leverage blockchain analytics – Track fund movements and collaborate with law enforcement.

How Apate Can Help

At Apate, we specialise in on-chain intelligence and fraud prevention, helping crypto platforms identify and mitigate scams before they cause harm. Our solutions enable:

• AI-powered scam detection – Spotting fraudulent patterns in real time.
• Behavioural analytics – Identifying high-risk user interactions.
• Seamless integration – Enhancing security without disrupting user experience.
• Protect your users and strengthen trust in your platform—partner with Apate today.

Read the full Chainalysis report here to understand the full scope of the threat.Ready to secure your platform? Contact Apate now and take the first step toward fraud-resistant operations.