Crypto Investment Scams: How ‘Pig Butchering’ Works and How to Spot It

The biggest crypto losses in the U.S. aren’t hacks. They’re long, patient scams that start with a wrong-number text and end with a fake trading account.

What to know

1. The FBI’s Internet Crime Complaint Center received reports of about $11 billion in crypto-related fraud losses in 2025.
2. Crypto investment fraud alone accounted for about $7.2 billion, more than any other crypto scheme.
3. Scammers build trust for weeks, then steer victims to fake trading sites that show invented profits.
4. A request to pay ‘taxes’ or ‘fees’ before withdrawing is a sure sign of a scam.

In its 2025 report, the FBI’s Internet Crime Complaint Center (IC3) recorded about 181,000 complaints involving cryptocurrency and roughly $11 billion in losses. Crypto investment fraud was the largest single category, at about $7.2 billion. People 60 and over reported the largest losses of any age group.

How the scam unfolds

1. The opening. A “wrong number” text, a dating app match or a friendly message on social media or LinkedIn.
2. The relationship. Weeks of daily chats. The scammer seems successful, kind and interested in your life.
3. The tip. They mention a trading strategy, an uncle with inside knowledge or a platform that’s making them money.
4. The fake platform. You’re guided to a website or app that looks like a real exchange. You deposit, often by buying crypto elsewhere and sending it in, and the dashboard shows impressive gains.
5. The small withdrawal. You may even be allowed to take out a little, to build trust.
6. The trap. When you try to withdraw more, you’re told to pay a tax, fee or “unlocking deposit” first. The account is never released.

Red flags

• A stranger who becomes a close online friend and brings up investing.
• Guaranteed or unusually high returns.
• A platform you’ve never heard of, reached through a link they sent.
• Pressure to keep the investment secret from family or your bank.
• Being told to pay to withdraw your own money.

Red flag

Before sending money to any investment platform, look it up yourself. Check whether it’s registered with U.S. regulators, search its name with “scam,” and talk to someone you trust in person. A real friend won’t be offended.

If it’s happening to you

1. Stop sending money, including for fees or taxes.
2. Save everything: chats, wallet addresses, transaction IDs and website addresses.
3. Report it to the FBI at ic3.gov and to the FTC at ReportFraud.ftc.gov.
4. Contact the exchange or bank you used to buy the crypto; they may be able to flag the receiving addresses.
5. Expect follow-up scams. Victims are often targeted again by fake “recovery” services; see crypto recovery scams.

Older relatives are frequently pushed into paying through crypto ATMs as well; this guide to crypto ATM scams explains that pattern.

Common questions

Why is it called pig butchering?

The name comes from the scammers’ own slang for ‘fattening up’ a victim with attention and fake profits before taking everything. Law enforcement increasingly calls it relationship investment fraud.

Are the people sending these messages also victims?

Often. Many scam operations are run from compounds in Southeast Asia that use trafficked workers forced to send the messages.

Can the money be recovered?

Sometimes, if it’s reported fast and funds can be traced to an exchange that freezes them. Report immediately to the FBI and the platform you sent money from, and beware of anyone who contacts you offering to recover it for a fee.