The truth behind crypto fraud: a silent billion-dollar industry without borders

Why we should stop using the word “pig butchering”

What is often referred to as “pig butchering” is a term used internationally to describe a specific form of crypto fraud. Yet we find that label misplaced and offensive. It suggests that victims were naïve or gullible, while that is rarely the case. In reality, these are people who have been deceived step by step by well-organized, professional criminals who know exactly how to build trust.

This form of fraud (crypto fraud) does not happen quickly or superficially, but gradually and with precision. The scammers take months, sometimes more than a year, to make contact, build relationships and create credible stories. They pose as investors, mentors or business partners and misuse real names, company logos and convincing websites to strengthen their story.

What these networks do is not only financial but also psychological abuse. The trust of victims is exploited, often with emotional pressure or manipulation that becomes increasingly subtle. For us at Paucitas, these are not “pigs” or “victims” in the simple sense of the word, they are people who have been deliberately manipulated by systems designed to make them fail. And precisely for that reason, they deserve protection, understanding and recovery, not shame.

Crypto fraud can happen to anyone

At Paucitas we see every day that crypto fraud and investment fraud can truly happen to anyone. It affects people from all layers of society, from entrepreneurs and directors to teachers, students, farmers and hardworking parents. No one is immune. The reason is simple, these scammers exploit human nature.

Specifically, they know exactly how to use emotions, trust and ambition. In addition, they pretend to be reliable professionals, friends or mentors. Furthermore, they misuse existing company names, credible websites and well-executed communication. As a result, their stories sound logical and their returns seem realistic, especially because in the crypto world such profits really do occur. For example, people love to talk about the times their coin became ten, twenty or even fifty times more valuable. Consequently, that makes promises of high returns not necessarily unbelievable, and therefore all the more dangerous.

Whether you are financially knowledgeable or completely new to crypto, the mechanism works the same for everyone. Indeed, trust is built step by step until the line between real and fake blurs. Therefore, that makes this form of fraud not only sophisticated but also more human than many want to admit.

The line between legitimate and fraudulent

One of the biggest challenges in our field is the distinction between deception and misunderstanding. Not every suspicious situation is pure fraud. Sometimes, for instance, it concerns a legitimate platform that temporarily holds funds for verification due to strict regulations, or miscommunication about procedures such as KYC. However, it is precisely in that grey area where technical terms and court processes intertwine that people get entangled.

Moreover, in international operations such as those of Chen Zhi, those boundaries blur even further. Specifically, funds are spread across dozens of networks, wallets and blockchains, often using so-called peel chains, mixers or bridges between different networks. As a result, the trail then runs cold, and for victims, their money is almost always gone forever.

The shame remains

What we see time and again is that victims wait a long time before seeking help. Not only because they fear their money is gone, but also out of shame. They do not dare to share it with family, friends or colleagues. That silence plays into the hands of the scammers. They count on people feeling ashamed and preferring to stay silent rather than admit they were deceived.

Still, there is nothing to be ashamed of. Indeed, the methods used by these criminal networks are sophisticated, psychological and often supported by teams of specialists. In particular, they use software, scripts and behavioral analysis to know exactly when someone is susceptible to the next step.

What the record seizure of 15 billion dollars really shows

Importantly, the seizure of fifteen billion dollars is not only a record-breaking action but above all a warning. Furthermore, it shows how immensely large and professional the world of crypto fraud has become. In fact, this was not a one-time incident in Asia but part of an international multibillion-dollar industry that quietly flourishes behind screens, websites and social media.

Moreover, what many people do not realize is that such operations take place worldwide, with branches reaching into Europe and the Netherlands as well. Specifically, we see new reports every day of investment fraud, fake trading platforms and investment apps, all part of international networks. In addition, these networks are well organized, have clear structures and make use of technological expertise, psychological strategies and cross-border money flows.

In reality, the actual amount of damage is shockingly many times higher than what is officially reported. Unfortunately, many victims remain silent out of shame, fear or distrust of authorities. Therefore, a large part of this crime never comes to light. Consequently, governments, banks and law enforcement agencies often see only a fraction of the total.

Above all, what this case exposes is how few people, even within the financial world, truly understand how large, complex and organized this sector of cybercrime has become. Indeed, the fraud industry surrounding crypto has evolved into a parallel financial system with billions in value, spread across thousands of wallets and platforms. In other words, it is no longer a fringe phenomenon but a mature industry that creates victims worldwide, without borders or faces.

What Paucitas can do for you

At Paucitas, we work daily to unravel both the technical and human aspects of crypto fraud and investment fraud. However, not only to limit damage but also to bring clarity where confusion or panic prevails. Specifically, our goal is to provide transparency, regardless of whether someone is certain that fraud has occurred or still doubts what exactly is going on. Therefore, everyone can turn to us for an independent and factual investigation based on transparency and care. In addition, we are available 24/7, act in complete discretion and always think along with you. We never judge, no matter how bad you think it is.

A final thought

In conclusion, crypto fraud is no longer a niche problem. Indeed, it is an industry causing billions in damages and victims all over the world. For example, the case of Chen Zhi shows how far these networks now reach.

Most importantly, you are not alone. We never judge, no matter how bad you think it is, and we work with complete discretion. So, if you suspect that you have been scammed, or simply want to know whether a platform is trustworthy, do not wait. Ask for clarity. We will gladly help you, factually, discreetly and without judgment.

At Paucitas, we are available 24/7 via 020 244 5774 or by email at paucitas@paucitas.com. You can also fill out the contact form below, and we will get in touch with you as soon as possible.

In brief: pig butchering

• Pig butchering is a form of long-running crypto fraud in which fraudsters first build trust via social media or dating apps.
• The victim is gradually persuaded to deposit increasing amounts into a fake investment platform displaying attractive on-screen balances.
• When the victim tries to withdraw, unexpected taxes or fees suddenly appear; after that, the counterparty disappears.
• Paucitas investigates these patterns on-chain and maps the money flows through mixers, bridges and exchanges.
• Early recognition and immediate action increase the chance that traces can still be followed.

Key terms

Pig butchering is a form of crypto investment fraud in which trust is built before the victim is financially stripped.

Romance scam is a form of trust-based fraud via dating or social media platforms, often the gateway to pig butchering.

Fake investment platform is a website or app that simulates crypto trading but does not execute real transactions; used to convince victims to keep depositing.

Cross-chain bridges are protocols that move crypto from one blockchain to another, often used to make money flows harder to follow.

Reference: see the AFM information on crypto-asset service providers and the EU framework for combating money laundering in Directive (EU) 2018/1673. Related on Paucitas: help with crypto fraud.