The "pig butchering" fraud caused a record $3.6 billion in losses in 2024, surpassing other forms of cryptocurrency fraud, according to a report by Cyvers.
2024 witnessed the alarming rise of the "pig butchering" fraud in the cryptocurrency sector. According to the latest report from the Web3 security company Cyvers, this type of fraud has caused up to $3.6 billion in losses, surpassing all other forms of cryptocurrency fraud and becoming the top threat of the year. This figure reflects the severity of the problem, especially when compared to the FBI's estimate of $3.96 billion in losses from similar scams in 2023.
"Pig butchering" is a sophisticated fraud method in which the scammer builds a fake relationship with the victim through dating apps or social media over an extended period, gaining their trust before luring them to invest in fake cryptocurrency platforms.
The Cyvers report tracked over 150,000 addresses and 800,000 transactions related to "pig butchering" scams, illustrating the widespread scale of this problem. The Ethereum (ETH) Blockchain was identified as the primary network used by criminals to transfer illicit funds.
Sophisticated method and severe consequences
The rise of "pig butchering" fraud reflects the increasing sophistication of cybercriminals. They invest time and effort to create fake profiles, nurture relationships with victims over weeks or even months, making them trust and easily convinced to invest in fraudulent cryptocurrency projects.
These fake platforms are often professionally designed, resembling legitimate exchanges or investment projects, making it difficult for victims to detect the fraudulent nature. As a result, many victims have lost their entire life savings.
In addition to the surge in "pig butchering," the Cyvers report also recorded a total of $2.3 billion in losses caused by cybercrime in 2024 through 165 incidents, a 40% increase from the previous year. However, this total loss is still 37% lower than in 2022. Ethereum remained the primary target, with access control breaches accounting for $1.9 billion in losses across 67 incidents. Smart contract vulnerabilities caused $456.8 million in losses, while a single address poisoning incident resulted in the theft of $68.7 million.
Despite the ongoing cybersecurity challenges, efforts to combat fraud have recovered $1.3 billion over the past year, largely thanks to blockchain investigators like ZachXBT and bug bounty programs.
The first quarter of 2024 recorded the highest number of incidents with 53 cases, but the largest financial losses occurred in the third quarter, totaling $760 million. Notable incidents include a $305 million breach at the DMM Exchange due to private key exposure, a $235 million hack on WazirX through a multisignature wallet vulnerability, and a $52 million loss at BingX due to a hot wallet attack. Interestingly, access control breaches, although accounting for only 41.6% of reported incidents, were responsible for 81% of the total losses.
In response, Cyvers recommends enhancing user education on cryptocurrency risks and online fraud, improving wallet security measures, implementing stricter regulations for cryptocurrency platforms, and deploying real-time monitoring and advanced threat detection systems to mitigate future losses.
