Crypto scams continue to pose a significant danger in 2024, with ‘pig butchering’ schemes leading the charge, according to a new report by blockchain analytics firm Chainalysis. The report, published on Thursday, highlights that while other illicit activities in the crypto space are on the rise, scams remain the predominant threat, driving the bulk of the sector’s multibillion-dollar crypto-crime problem.
Scams Dominate the Crypto-Crime Landscape
Chainalysis’ report underscores that scams are the most significant contributor to crypto-related crimes in 2024, even though the overall percentage of on-chain value linked to illicit activities remains below 1%. Eric Jardines, the research lead at Chainalysis, noted that while the dollar value associated with these scams is large, it still represents a relatively small fraction of the total crypto market.
However, other forms of crypto misuse, such as using digital assets for child exploitation material and other cybercrimes, are gaining traction. Despite these emerging threats, scams, particularly ‘pig butchering’ scams, continue to dominate.
The Rise of ‘Pig Butchering’ Scams
‘Pig butchering’ scams are especially concerning due to the psychological manipulation they involve. Scammers “fatten up” their targets by building trust through romantic overtures or other deceptive tactics, eventually convincing them to invest in fraudulent schemes. Once trust is established, the victims are lured into fake investment opportunities, where their funds are ultimately stolen.
While stealing funds is the primary goal, scammers face another challenge: how to cash out. Centralized crypto exchanges, which serve as common off-ramps, have improved their efforts to crack down on illicit activities, making it harder for scammers to liquidate stolen assets.
Huione Guarantee’s Role in Facilitating Crypto Crimes
To bypass these restrictions, some scammers turn to platforms like Huione Guarantee, an online marketplace managed by a Cambodian conglomerate. This platform allows users to post offers to buy or sell virtually anything, including cryptocurrency. Unlike regulated exchanges, Huione Guarantee merely facilitates transactions without scrutinizing the origins of the money or the identities of those involved.
Since 2021, Huione Guarantee has processed a staggering $49 billion in crypto transactions, with Chainalysis suggesting that a portion of this activity is likely connected to crypto-criminals engaged in ‘pig butchering’ scams and money laundering operations.
