"Kill pig" schemes gradually replacing Ponzi schemes as major scams! Chainalysis: Harvesting in just over a month

The research firm Chainalysis pointed out in its mid-year cryptocurrency crime report that the scam involving "pig slaughtering plates" is rapidly replacing traditional Ponzi schemes, becoming the primary form of cryptocurrency fraud in 2024.

What is a "Pig-Killing Scheme"?

The term "Pig-Killing Scheme fraud" refers to criminals who establish romantic or ambiguous relationships with their victims through messaging or dating apps to "fatten up" the victims; then they use various reasons, including false investment opportunities, to request large sums of money and drain their assets.

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Trend Changes in Fraud: Rise of Pig-Killing Schemes

Shortening Fraud Harvesting Periods

A report by Chainalysis shows that as law enforcement capabilities increase and regulations tighten, cryptocurrency criminals are gradually abandoning Ponzi schemes that require a lot of effort and time to operate and are turning to quickly harvesting "Pig-Killing Scheme fraud."

The image above shows that the lifespan and cycle of fraud have been decreasing year by year, from 271 days in 2020 to 42 days in 2024.

At the same time, they are also turning to using new wallets to disguise money flows, with 43% of fraudulent income flowing into newly active wallets this year, indicating a continuous increase in wallets used for new fraudulent activities.

New Fraudster Strategy: Simultaneous Online and Offline Operations

Furthermore, it has been found that fraudsters are quickly adjusting and adopting online and offline strategies, using new encrypted wallets and multiple social media accounts for short but efficient fraudulent activities.

Statistically, fraudsters have spent over $10 million in purchasing social media accounts over two years and using them for "Pig-Killing Scheme" activities:

To avoid detection, many fraudsters operate multiple smaller fraudulent activities simultaneously to sustain the overall operation of the fraud organization.

Centralized Institutions Still Effective in Combating Illegal Activities

Eric Jardine, Director of Cybercrime Research at Chainalysis, stated that these disruptive measures make it easier for criminals to quickly change their infrastructure and make it more difficult to track them online:

However, being harder to track and shut down does not mean it's impossible, records of law enforcement and asset recovery efforts are still encouraging."

Reportedly, cryptocurrency companies such as stablecoin issuer Tether, cryptocurrency exchanges Binance, and OKEx have been actively blocking or restricting measures against illegal activities.

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Victim Group Analysis: Elderly Beware

Eric Jardine also conducted an in-depth analysis of the victim groups:

We found that they are mostly groups that are easily able to build interpersonal relationships, including the elderly, people in life transition stages, and those seeking online friendships or romantic relationships.

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Huione Guarantee: Large Financial Platforms as Shields for Fraudsters

Chainalysis also cited the case of Huione Guarantee, an operation of the Huione Group, a Cambodian conglomerate, exposed last month by the online tracking team Elliptic.

It is reported that the company is suspected of laundering money with Southeast Asian online fraudsters, handling up to $49 billion in illegal money flows, and connecting buyers and sellers through platforms like Telegram.

They revealed that while Huione appears to operate overseas remittances, insurance, and luxury travel businesses, their funds are covertly involved in a large number of illegal activities related to cryptocurrency:

Huione Guarantee has evolved into a vast ecosystem supporting rampant "Pig-Killing Schemes, investment fraud, and money laundering activities" in Southeast Asia.