Pig butchering: the crypto scam draining billions from Americans

How pig butchering crypto scams work, what Americans lost in 2025 and how the US is going after Southeast Asian scam compounds and the Prince Group.

2026-10-20

It usually starts with a wrong-number text, a friendly message on social media or a match on a dating app. Weeks later, the victim is "investing" in cryptocurrency on a platform that shows impressive gains. When they try to withdraw, the money is gone. This is what investigators call pig butchering: the victim is "fattened" with trust before being "slaughtered".

In the United States, the scheme has become one of the largest sources of fraud losses, and Washington now treats the Southeast Asian compounds behind it as a priority for sanctions, seizures and prosecutions.

How the scam works

The FBI's 2025 Internet Crime Report describes a consistent script, even though it does not use the term pig butchering:

First contact. Scammers reach out via text, social media, ads or dating apps, then move the conversation to an encrypted messaging app.
Trust building. They pose as successful insiders who offer trading tips, often involving crypto or gold.
Fake platform. Victims send crypto to a fraudulent site or app that displays fabricated profits and encourages larger deposits, sometimes with offered loans.
The trap closes. When victims try to cash out, they are told to pay "taxes" or "fees". Then the scammers disappear.
Second hit. Some victims are later approached by fake "recovery" services that promise to get the money back for an upfront fee.

The FBI says these operations are largely run by organized criminal groups in Southeast Asia that use trafficking victims as forced labor.

The numbers: US losses in 2025

The IC3 received 1,008,597 complaints in 2025, with reported losses of about $20.9 billion, up 26% from 2024. Investment fraud was the costliest category.

Indicator (FBI IC3, 2025)	Figure
Investment fraud losses (all types)	$8.65 billion (72,984 complaints)
Crypto investment fraud losses	about $7.2 billion (61,559 complaints)
All crypto-related fraud losses	$11.3 billion
Romance/confidence fraud losses	$929 million
Crypto ATM/kiosk losses	$389 million (+58% vs 2024)

Treasury estimated in October 2025 that Americans lost at least $10 billion to Southeast Asia-based scam operations in 2024, a 66% jump over the prior year. These are reported losses only; analysts cited by TRM Labs estimate that just 15% to 20% of victims report.

Victims who don't know they are victims

Through Operation Level Up, the FBI contacts people it identifies as being in the middle of a crypto investment scam. In 2025 it notified 3,780 victims, and 78% did not know they were being scammed. The FBI estimates the notifications saved about $226 million that year, and roughly $500 million since the program began in January 2024.

Behind the screens: the scam compounds

Treasury describes a recruitment model built on deception: people are lured with offers of well-paid customer service or tech jobs, then held in compounds where passports and phones are confiscated and workers face violence, fines and threats. They are forced to run the scams.

The compounds are concentrated in Cambodia, Burma (Myanmar) and Laos. US actions have named sites such as KK Park, Huanya and Tai Chang in Burma, and the Jinbei and Mango Park compounds in Cambodia.

What the US has done

The Prince Group case

On October 14, 2025, the US and UK announced what Treasury called the largest action ever against cybercriminal networks in Southeast Asia:

Sanctions: OFAC designated 146 targets in the Cambodia-based Prince Group transnational criminal organization, including 117 affiliated businesses.
Indictment: Federal prosecutors in Brooklyn charged chairman Chen Zhi, who allegedly oversaw at least ten scam compounds.
Record forfeiture: The Justice Department moved to seize about 127,271 bitcoin, then worth roughly $15 billion, which The Record described as the largest forfeiture in DOJ history.
Huione cut off: FinCEN finalized a Section 311 rule barring US banks from correspondent relationships with Cambodia's Huione Group, which it says laundered at least $4 billion between August 2021 and January 2025.

Prosecutors alleged that one co-conspirator boasted of earning more than $30 million a day. In January 2026, Chinese authorities announced that Chen Zhi had been escorted from Phnom Penh to China, according to the Global Times.

The Scam Center Strike Force

On November 12, 2025, the US Attorney for the District of Columbia launched a Scam Center Strike Force bringing together DOJ units, the FBI, Secret Service, HSI, Treasury and the State Department. OFAC also sanctioned Burma's Democratic Karen Benevolent Army and four of its leaders over scam compounds. By late February 2026, the strike force reported more than $580 million in crypto frozen or seized.

Red flags

A stranger who starts chatting after a "wrong number" text.
An online friend or romantic interest who quickly talks about crypto profits.
Pressure to move to WhatsApp, Telegram or another private app.
A trading platform you cannot find in regulator databases.
Being asked to pay "taxes" or "fees" before you can withdraw.

What to do

Stop sending money the moment a withdrawal requires a fee.
Contact your bank or exchange immediately and ask about freezing or recalling the transfer.
Report to ic3.gov, with wallet addresses, transaction IDs and screenshots. The IC3 Recovery Asset Team froze $679 million across all fraud types in 2025.
Beware of recovery offers. Anyone charging upfront to retrieve lost crypto is almost certainly another scammer.
Talk about it. Shame keeps victims silent; reporting helps investigators trace wallets and freeze funds.