Commodity Futures Trading Commission (CFTC) has formed
partnerships with several organizations to raise awareness about cryptocurrency
relationship investment scams dubbed “pig
butchering.” The regulator’s Office of Customer Outreach and Education
(OCEO) is spearheading this initiative to educate and protect consumers from
falling victim to these complex fraud schemes.
Efforts to Fight Fraud
According to the official statement, the CFTC is teaming up with various organizations, including the American Bankers Association Foundation,
federal agencies, and private regulators. The collaboration focuses on
distributing a comprehensive infographic that outlines the “pig
butchering” scam. This visual guide details the various stages of the
scam, from initial contact to financial loss, and highlights key warning signs
for potential victims.
Speaking about the initiative, CFTC’s Office of
Customer Education and Outreach Director Melanie Devoe, mentioned: “Partnering
with federal and state regulators as well as consumer protection groups and
other organizations helps spread the CFTC’s customer education message and
hopefully reaches people before they can get scammed.”
“These partnerships focus on a relationship confidence
fraud the perpetrators commonly refer to as ‘pig butchering,’ that is estimated
to cost Americans billions each year.”
Crypto #investment or “relationship” scams are on the rise and @CFTC is releasing a prevention brochure in partnership with @ABABankers, @FBI, @FinCENnews, @FINRA, @HSI_HQ, @IRSnews, @SecretService, and @SEC_Investor_Ed. Learn more: https://t.co/Rc10CxD6An pic.twitter.com/W3SWNieJs3
— CFTC (@CFTC) September 11, 2024
In addition to the infographic, the CFTC is also
working with the US Securities and Exchange Commission, the Financial
Industry Regulatory Authority, and the North American Securities
Administrators Association to create an investor alert. This alert is designed to educate investors
about the tactics scammers use to infiltrate even the most cautious
investors’ minds and wallets.
Protecting Investors from “Pig Butchering” Scams
CFTC has urged investors to avoid responding to unsolicited messages from unknown sources,
a common tactic used by scammers. With these new partnerships and educational efforts,
the watchdog aims to significantly reduce the prevalence of “pig
butchering” scams and protect investors from financial harm.
In the second quarter, the cryptocurrency industry faced heightened security incidents, with total losses reaching $629.7 million
across 49 incidents. According to a Survey by blockchain security firm Cyvers,
only 24% of stolen funds were recovered. Since the beginning of the year,
cryptocurrency criminals have seized over $1.38 billion, most of which resulted
from “access control breaches.”
Despite the amount recovered rising by 42% compared to
the corresponding period last year, the recovered amount reportedly represents
less than a quarter of the total losses. This means that barely one in four
victims of digital asset hacks can recover their funds.
This article was written by Jared Kirui at www.financemagnates.com.
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