Investment fraud was the single largest fraud category in the FBI's 2025 Internet Crime Report, at $8.6 billion — nearly half of all reported losses — across 73,000 complaints, up 52% from the year before. Cryptocurrency-specific schemes within that category, commonly called "pig butchering," accounted for $7.2 billion of it, with complaint volume up 48% year over year. This is Part 3 of our ongoing scam series, and it's the installment Part 2 promised: the scam that's designed to look exactly like the kind of opportunity a patient, research-minded investor might actually consider.
Where the term comes from, and why regulators are moving away from it
"Pig butchering" is a direct translation of a term that originated with the criminal operations running these schemes, describing the practice of "fattening up" a victim with attention and small trust-building wins before the financial "slaughter." Federal regulators, including the Commodity Futures Trading Commission, increasingly describe the same scheme as "romance-based investment fraud" or "romance baiting" — a shift that reflects what's actually happening to the victim: a manufactured relationship, not just a bad trade.
How the scheme actually works
The Financial Crimes Enforcement Network (FinCEN) describes a consistent four-stage pattern:
- Initial contact. Scammers reach out through dating apps, social media, or a seemingly misdialed text — often posing as a successful, attractive stranger or an old acquaintance — and spend real time building a relationship before money ever comes up.
- The investment pitch. Once trust is established, the scammer introduces a cryptocurrency trading opportunity and directs the victim to a fraudulent platform built to mimic a legitimate exchange.
- Fabricated returns. The fake platform shows the victim's "investment" growing, and scammers sometimes allow a small early withdrawal specifically to build confidence before pushing for much larger deposits — FinCEN notes victims have liquidated retirement accounts and taken out home equity loans to keep investing.
- Extraction and cutoff. When the victim tries to withdraw a meaningful amount, the platform demands "taxes" or "fees" to release the funds. Once that final payment is made — or the victim stops paying — the scammer disappears, and the funds are gone for good.
The red flags federal regulators have identified
The CFTC's guidance centers on a short list of behaviors worth treating as hard stops, not just yellow flags: someone you've met only online who avoids video calls or an in-person meeting; pressure to move money onto an unfamiliar trading platform; irritation, guilt-tripping, or anger when you bring up withdrawing funds; sudden "technical problems" or fees standing between you and your own money; and, in the more aggressive cases, threats once you try to stop.
FinCEN's alert adds a financial-behavior layer worth knowing even if you're not the one at risk: a bank or exchange seeing a customer with no prior crypto history suddenly attempting large transfers, uncharacteristic early liquidation of retirement savings, or a new home equity loan taken out specifically to fund cryptocurrency purchases are all patterns financial institutions are now trained to flag.
Why crypto specifically is the preferred vehicle
Cryptocurrency transfers are generally irreversible once confirmed, move easily across borders, and — to someone without direct experience trading it — a "sophisticated trading platform" showing rising balances is genuinely difficult to distinguish from a real one at a glance. None of that makes cryptocurrency itself the problem; it makes it an effective tool for a scheme that depends on money leaving fast and never coming back. The same underlying trust-building tactic works with other unfamiliar "investments" too — the crypto framing is common because it's currently the easiest sell.
What actually protects you
- Reverse-image search a new online romantic interest's photos. The CFTC specifically recommends this as a first, low-effort check — stolen or stock photos are a common tell.
- Never invest based on guidance from someone you've only met online. This holds regardless of how long you've talked, how legitimate the platform looks, or how real the relationship feels.
- Verify any platform independently before sending money — check whether it's registered with the SEC, CFTC, or your state regulator, using the regulator's own website rather than a link the "investor" sent you.
- Treat any request to pay a fee or tax to unlock your own money as a hard stop. Legitimate platforms don't withhold your own funds pending an additional payment.
- A real partner never gets angry that you want a second opinion. Pressure and secrecy around money are the tell across every scam in this series, not just this one.
If it's already happening to you or someone you love
- Stop sending money immediately, even if the platform or the relationship claims one more payment will unlock everything.
- Contact your bank or crypto exchange right away — a fast report sometimes allows a transfer to be flagged or frozen before it fully clears.
- Report it to the FBI at IC3.gov and to the FTC at ReportFraud.ftc.gov, which helps regulators track the scale of these schemes and, occasionally, trace recoverable funds.
- Talk to someone you trust before making any decision the "relationship" is pushing you toward, especially a large or urgent one. Isolation from other perspectives is a feature of the scheme, not a coincidence.
This closes out the first three parts of our scam series — phishing basics, AI voice cloning, and now romance-based investment fraud. The common thread across all three, worth repeating one more time: urgency, secrecy, and pressure to move money quickly are the tell, regardless of how the story around them changes.