January 12, 2024

Bitrace and ChainArgos have recently authored the paper “Connecting Chinese and American Scam Victims” which primarily addresses the phenomenon of “pig butchering” scams and potential cross border connections. These scams involve luring victims into making increasingly larger cryptocurrency investments before the fraudster disappears. This paper focuses on victims from China and the USA, demonstrating that the scams in these countries likely originate from the same group or syndicate.

“Pig Butchering” is a form of investment fraud and confidence trick where victims are gradually enticed to invest more in cryptocurrency under the guise of a sound investment opportunity. The scam culminates with the scammer disappearing, leaving the victim with significant losses.

The authors provide evidence of a common perpetrator by showing that scammers in both China and the USA share cryptocurrency addresses, use overlapping sets of money-laundering services, and operate through similar methodologies. This is substantiated through detailed analysis of victim reports, cryptocurrency transactions, and laundering techniques.

The article utilizes a combination of on-chain and documentary research to trace scam proceeds through the cryptocurrency ecosystem. This involves analyzing victim reports, identifying scam and scam wallet addresses, and tracking the flow of funds to establish connections between scams in different countries.

A “Drainer Scam” is a type of online fraud where victims are tricked into downloading malicious software, often disguised as a legitimate application. This software then drains their cryptocurrency wallet by transferring funds to the scammer.

Victims of such scams should immediately report the incident to local law enforcement agencies. They should also seek legal advice, especially if substantial amounts are involved. It’s crucial to preserve all communication and transaction records related to the scam, as these can be vital for investigations.

Conclusion:

This article sheds light on the intricate and interconnected nature of online scams, particularly “pig butchering” and “drainer” scams. The analysis reveals not only the sophisticated methods used by scammers to exploit victims in different countries but also underscores the challenges faced by law enforcement agencies in tackling these cross-border crimes. The study emphasizes the need for global cooperation and more robust mechanisms to track and curb such fraudulent activities in the digital age.