Crypto

Crypto Honey Trappers Will ‘Cork You Up Like A Pig’ If You’re Not Vigilant, FBI Warns

The Federal Bureau of Investigation (FBI) has warned users of financial products, including crypto users, of growing incidents of ‘pig butchering’ cyber scam. He warned victims to be aware of the scam lest they fall prey to it and lose their money.

US Secret Service Special Agent Shawn Bradstreet said in an interview with bitcoin.com“Once they [the victims] see how easy it is to invest, they see an increase in their screen count, and then they end up investing all their savings in a matter of days.

Mridul Gupta, COO, CoinDCX, a crypto exchange, said that before investing in crypto assets, “investors should familiarize themselves with some key elements such as choosing a compliant exchange that follows KYC verification methods To identify a reliable exchange, one should evaluate the exchange’s audit information as it helps in understanding the financial health of a business.”

What happens in this cyber scam?

Indians are no strangers to this type of scam. A Ladakh resident (name withheld) had also fallen victim to this “pig cutting” scam about six months ago, and it involved a lady from Hong Kong. He had lost savings worth around Rs 90 lakh in this scam.

Karmesh Gupta, co-founder and CEO of WiJungle, a Haryana-based cybersecurity company, said the ‘pig butcher’ cyber scam was declared four years ago in China. Previously it was difficult to get the money across the border as it used to be a normal online scam. But nowadays, crypto gives you the ability to move your money across borders, from one geography to another.

Vijay Pravin Maharajan, Founder and CEO of bitsCrunch, a Blockchain analytics firm based in Germany, says the “pig cutting” scam is a new name given to an old scam, which used to happen with financial products, and has now found its way into the crypto world.

According to Satnam Narang, Senior Research Engineer at Tenable, a US-based cybersecurity solutions company, this scam involves scammers using various dating apps, instant messaging apps and others to lure users into their giving falsified promises and assurances of a relationship.

After gaining a user’s trust, they redirect users to invest in fake product website like fake cryptocurrency website or other types of fake financial platforms, such as a fake stock exchange. Then, these scammers encourage the user to invest in this exchange, and the front-end interface of the exchange also shows the growth of invested money. But when the user tries to withdraw that money, for some reason it does not happen, and the user ends up getting scammed.

Maharajan said that in the crypto world, scammers, instead of asking for money upfront, gradually convince their target to move their cryptocurrency away from legitimate wallets or exchanges to scam websites and controlled by the scammer.

“These websites have been designed to appear as if they were genuine trading platforms,” adds Maharajan.

The user from Ladakh also encountered the same problem. A girl from Hong Kong contacted him and told him about a crypto exchange platform where he could potentially make millions.

“I could see my money increase by 2-3% a few hours after I invested, and then I would invest more money every week and later every day as well. It became a habit to invest every day, and I was waiting for my money to grow so that I could finally withdraw it one day,” says the user from Ladakh.

WiJungle’s Gupta said the motive is to make you feel comfortable for a free and informal conversation. At the end of the day they steer the conversation towards an investment, this process usually takes a week or more. The person keeps his patience so as not to feel like it’s a scam. They will try to understand your current investments, stocks, mutual funds and finally crypto which is the key aspect.

But when he tried to withdraw the money, he was told that the crypto exchange will deduct the tax at the rate of 30% and deposit it with the Indian tax authorities, so he will have to pay the money from the tax in advance before withdrawing its profits. .

“I also paid this 30% tax on my winnings, but even after that they wouldn’t let me withdraw my money,” he says.

This supposed crypto exchange did not ask for their PAN or Aadhaar card details, or any type of Know Your Customer (KYC) information. Yet, it claimed to file the income tax on the user’s behalf with the income tax department of India.

CoinDCX’s Gupta pointed out that every crypto investor should be aware that the 30% tax is payable by the investor as part of their annual tax return and is paid directly by the investor. The 30% tax is not deducted by the exchange, while the 1% TDS is deducted by the exchange and paid to the government.

Gupta from WiJungle informed users that one can only save oneself if one simply ignores these texts. Ignore any kind of financial dealings with people you’ve never met or who are complete strangers. Never trust strangers for any type of investment advice. Being careful can save you from being scammed. Trust, but verify every piece of information someone gives you. Above all, avoid such messages in the beginning and conversations with strangers who could cause you financial problems later.

The pig butcher phenomenon is part of a long scam, so it may not be immediately obvious to the victim that they are being fed lies in order to develop a fake relationship and gain their trust.

Red flags to watch out for

Hog slaughter is a long-running scam: The term itself means that pigs are fed, fattened and then slaughtered. Likewise, scammers don’t do a one-time big scam with every user once. They slowly build rapport with the victim and then take small steps to build the relationship.

“The pig-slaughter phenomenon is part of a long-running scam, so it may not be immediately obvious to the victim that they are being fed lies in order to develop a fake relationship and gain their trust. Thus, the users should be very careful when contacted out of the blue in various dating, instant messaging and other apps by strangers,” says Narang.

Frequent parries can make you a target: These scammers scan various dating and social media websites for potential targets. Narang says that one of the key metrics they use to sort targets is to see which users are talking about their success with traditional or alternative investments, or others like cryptocurrency, or, who has a lot of interest in these subjects.

So, if you receive an investment offer that sounds too good to be true, don’t become gullible and fall prey to it. Instead, leave it out and report it to the authorities.

Love bombing from the start: One of the signs that you’ve been scammed is when you get love bombarded, i.e. when the scammer says extremely nice things about you, even though you know each other from sadness.

Police in Pune last year arrested a 27-year-old woman who used to do this type of scam. She used to create several dating profiles of her and bomb men lovers and then ask them to come to Pune where she would rob them.

Krishna Prakash, Commissioner of Police (CP) of Pimpri-Chinchwad Police Station, said Bombay Mirror that the woman previously worked in a telecommunications company.

“After lockdown, she was out of work. In the past year, she robbed 16 men in Pune and Pimpri-Chinchwad through dating apps. Police seized a total amount of Rs 15.25 lakh in cash to the accused, in addition to 289 grams of gold and mobile phones. She planned to target men and women who do not reside in Pune, but from other states,” Prakash said as quoted by the log.

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