Chainalysis Report: Pig Butchering Scams Overtake Ponzi Schemes in Crypto Crime
In a significant shift within the cryptocurrency crime landscape, scammers are increasingly abandoning elaborate Ponzi schemes in favor of more targeted and devastating tactics, particularly “pig butchering” scams. This trend, highlighted in Chainalysis’ latest mid-year crypto crime update, reveals a rapidly changing ecosystem where criminals adapt to evade law enforcement and maximize profits.
The report, released on August 29, 2024, shows that the average lifespan of crypto scams has dramatically decreased from 271 days in 2020 to just 42 days in 2024. This reduction is largely attributed to improved law enforcement efforts and stricter controls implemented by stablecoin issuers, forcing scammers to evolve their strategies.
Eric Jardine, cybercrimes research lead at Chainalysis, commented on this trend: “The decline in scam lifespan is a testament to the effectiveness of law enforcement efforts. These interventions have forced scammers into more rapidly turning over their infrastructure, making them harder to track on-chain.”
Pig butchering scams, which involve building trust with victims over time before luring them into fraudulent investments, have emerged as the largest revenue-generating scam type. One Myanmar-based operation, known as KK Park, has reportedly netted over $100 million in 2024 alone.
The report also highlights a surge in new scams, with 43% of year-to-date scam inflows going to wallets activated in 2024. This indicates a shift towards shorter, more dynamic, and potentially more lucrative campaigns.
Scammers are also adapting their off-chain tactics, frequently purchasing established social media profiles from platforms like Facebook, Tinder, and Match.com to appear more credible. Over the past two years, illicit services selling such profiles have seen crypto inflows exceeding $10 million.
Another concerning development is the rise of online marketplaces facilitating these scams. Huione Guarantee, tied to a Cambodian conglomerate, has processed over $49 billion in cryptocurrency transactions since 2021, with connections to various illicit activities including pig butchering scams and money laundering.
While crypto scams remain the largest sector of illicit activity in the space, the report notes that other forms of cybercrime are also on the rise, including the distribution of child exploitation material and the sale of hacking tools.
Despite these challenges, Jardine remains cautiously optimistic: “Harder to track and shut down does not mean impossible, and the record of law enforcement interventions and asset recovery is encouraging.”
As the crypto crime landscape continues to evolve, the report underscores the need for ongoing vigilance, improved security measures, and collaborative efforts between law enforcement, blockchain analytics firms, and the wider cryptocurrency community to combat these emerging threats.
