'Pig-Butchering' Scams Evolve into a Major National Security Concern, Warns Chainalysis

The massive "pig-butchering" scam scandal, which has grown into a multibillion-dollar problem, is now being viewed as a significant national security issue. This alarming perspective comes from a recent discussion featuring experts from Chainalysis and anti-fraud investigators.

Key Takeaways:

Pig-butchering scams are now a national security concern, involving human trafficking and money laundering.
Criminal organizations are growing in sophistication, touching all parts of the financial system.
The scale of crypto scam losses continues to rise, with the U.S. Department of Justice seizing significant amounts connected to these activities.
Coordinated global enforcement responses are underway, with involvement from both government and private sectors.

The Rise of Pig-Butchering Scams

Andrea Fierman, who leads national security intelligence at Chainalysis, along with Erin West, founder of Operation Shamrock, explained how pig-butchering has evolved into a severe transnational crime that incorporates human trafficking, money laundering, and fraud driven by cryptocurrencies. They noted that these scams and the networks behind them have expanded far beyond typical fraud operations.

The Pervasiveness of Pig-Butchering Rings

West highlighted that this threat has permeated the entire financial landscape. “If anyone is involved with money in any capacity, they are part of this issue,” she remarked, emphasizing the need for increased awareness among banks, exchanges, and regulators.

These scams often rely on prolonged social engineering tactics. Criminals cultivate trust with victims, frequently through dating apps or social media, before luring them to counterfeit cryptocurrency investment platforms. The ultimate objective is to “fatten” victims' accounts with fake profits and then completely deplete them.

Fierman and West described how criminal rings in Southeast Asia operate dormitory-style facilities where trafficked individuals are compelled to manage these scams. Victims abroad lose their life savings, while those coerced into the schemes within the facilities are held against their will.

Data from Chainalysis reveals a nearly 40% spike in pig-butchering activity in 2024, which contributed to over $9.9 billion in total crypto scam revenues for that year.

Enforcement and Seizures

In 2023, the U.S. Department of Justice seized approximately $225 million linked to these fraudulent operations, showcasing the scale of this growing ecosystem. Experts pointed out another layer of exploitation that often goes unnoticed. After being defrauded, victims frequently receive follow-up contacts from fraudulent recovery firms masquerading as law enforcement or investigators.

“Once you fall victim to this type of scam, you will be placed on a list,” stated West. “This makes you even more susceptible to further scams.”

Global Response to Increased Scam Activity

The rise of pig-butchering scams is coinciding with significant international enforcement actions. In October, U.S. officials unveiled the largest cryptocurrency seizure associated with global online fraud to date, focusing on the Cambodia-based Prince Holding Group and its chairman, Chen Zhi. Simultaneously, the Treasury Department's Office of Foreign Assets Control (OFAC) imposed sanctions on 146 individuals and entities affiliated with the group, classifying it as a transnational criminal operation involved in fraud, extortion, and forced labor.

The involvement of the private sector has also increased in tandem with governmental initiatives. In August, Tether froze nearly $50 million in USDT linked to a Southeast Asia-based pig-butchering ring after investigators traced the funds across 19 addresses. Additionally, Binance joined the T3+ intelligence collaboration, which includes TRON, Tether, and TRM Labs, to assist in freezing nearly $6 million tied to another scam.

Binance reported that its internal measures prevented approximately 7.5 million users from losing nearly $10 billion to fraud between December 2022 and May 2025. Coinbase has also engaged in similar efforts, helping the U.S. Secret Service recover $225 million in USDT, marking one of the agency's largest crypto seizures. This involved tracing the funds to 140 OKX accounts, many created under identities of trafficking victims coerced into running scam operations.

The scale of financial losses continues to grow. According to the FBI’s latest Internet Crime Report, U.S. citizens lost upwards of $9 billion to online investment fraud last year. TRM Labs estimates that over $53 billion related to crypto fraud has been documented globally since 2023, indicating this figure is likely only a small fraction of the actual losses.