In 2024, pig butchering scams had a good year, racking up $3.6 billion in losses. This scheme has officially outpaced all other crypto frauds this year, according to a report from Cyvers, a web3 security firm.
Investment fraud
So, what exactly is pig butchering? It’s a long con where scammers sweet-talk their victims over time, coaxing them into making investments in what they think are legitimate crypto platforms.
The report reveals that 150,000 addresses were linked to these scams, with 800,000 transactions showing just how widespread the issue has become. And get this, $3.6 billion of those losses were traced back to the Ethereum blockchain alone!
The FBI had previously estimated that pig butchering schemes caused about $3.96 billion in losses in 2023 alone, and Cyvers pointed out that scammers are getting craftier, often luring victims through dating apps and social media.
They create fake profiles and build trust over weeks or even months before convincing their targets to invest in bogus crypto ventures.
User error, more surveillance
Cyvers suggests ramping up user education and tightening regulations around crypto platforms may help, but they also emphasize the need for better wallet security and real-time monitoring to catch these fraudsters red-handed before they can make off with anyone’s hard-earned cash.
Cyber threats in general have shot up by 40% this year, leading to $2.3 billion lost across 165 incidents.
But don’t get too worried, overall losses are still down 37% compared to 2022. Ethereum seems to be the main target for these cyber crooks, with access control breaches accounting for $1.9 billion in losses from just 67 incidents.
Smart contract exploits added another $456.8 million, while one particularly address poisoning incident cost victims $68.7 million.
Recovery
On a brighter note, efforts to combat fraud have seen some success, recovering about $1.3 billion this year thanks to diligent on-chain investigators like ZachXBT and various bug bounty programs.
The first quarter of the year was particularly brutal, with 53 incidents reported, but the third quarter packed the biggest punch financially, with losses hitting $760 million.
Some notable incidents include a $305 million breach at DMM Exchange due to a compromised private key and a $235 million hack at WazirX stemming from a multi-signature wallet vulnerability.
BingX also took a hit with losses of $52 million after hot wallet exploits.
