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# Crypto investment scams: FBI logs $7.2 billion in 2025 losses
- URL: https://bullquill.com/crypto-investment-scams-pig-butchering-explained/
- Published: 2026-10-23T08:15:27.000Z
- Updated: 2026-10-24T07:13:16.000Z
- Description: The scams follow a set script: a friendly contact, a fake trading platform showing fake profits, then demands for fees before any withdrawal. Here are the red flags, who runs the scam centres, and how US authorities are responding.
- Author: Rowan Ashby
- Tags: Crypto, Explainer, Crypto Scams, FBI, Bitcoin, Scam Center Strike Force, FinCEN, #lang-en, #evergreen, #tr-crypto-investment-scams-pig-butchering-explained

## Key takeaways

- Crypto investment scams, often called "pig butchering," were the costliest fraud category in the FBI's 2025 Internet Crime Report, with $7.2 billion in reported losses from 61,559 complaints.
- All crypto-related complaints together produced about $11.37 billion in reported losses in 2025, more than half of the $20.9 billion total the FBI recorded.
- The scam follows a predictable script: a friendly contact, a fake trading platform showing fake profits, then demands for "taxes" or "fees" before any withdrawal, and often a follow-up "recovery" scam.
- US authorities link much of the activity to scam compounds in Burma, Cambodia and Laos. The Justice Department's Scam Center Strike Force, formed in November 2025, reported more than $580 million in crypto frozen or seized by February 2026.
- Warning signs are consistent: anyone you met online who offers investment tips, promises returns that are "guaranteed", or makes a request to pay upfront to get your own money back.

## What are crypto investment scams and why are they called "pig butchering"?

Crypto investment scams, often called "pig butchering," were the costliest fraud category in the FBI's 2025 Internet Crime Report, with $7.2 billion in reported losses from 61,559 complaints. A stranger builds trust over days or weeks, then steers the target onto a fake trading platform. Beware follow-up fraud aimed at victims: see [how crypto recovery scams work](https://bullquill.com/crypto-recovery-scams-explained/).

The nickname "pig butchering" comes from a Chinese term for the scheme. The victim is "fattened up" with attention and apparent gains before the scammers take everything. The US Justice Department uses the term in its own releases, while FinCEN also uses the more neutral label "relationship investment scam."

The topic is back in the news this week. A court in China moved to confiscate more than 61,800 bitcoin tied to a separate, older wealth-management fraud, a case Bullquill covered in [China seeks to confiscate Qian Zhimin's 61,800 bitcoin](https://bullquill.com/china-seeks-confiscation-qian-zhimin-61800-bitcoin/). That case was a Ponzi-style scheme sold inside China, not a pig-butchering operation, but it shows how fraud proceeds increasingly end up stored in crypto.

## How big is the problem? The FBI's 2025 numbers

The FBI's IC3 annual report for 2025, released in April 2026, was the first to log more than one million complaints in a year. According to the report figures summarised by The Block, crypto was involved in a large share of the money lost.

| Category (IC3, calendar year 2025)       | Complaints | Reported losses |
| ---------------------------------------- | ---------- | --------------- |
| All internet crime                       | 1,008,597  | $20.9 billion   |
| All crypto-related complaints            | 181,565    | $11.37 billion  |
| Crypto investment fraud                  | 61,559     | $7.2 billion    |
| Crypto-related, victims aged 60 and over | 44,555     | $4.4 billion    |
| Crypto ATM and kiosk scams               | 13,460     | $389 million    |
| Recovery scams                           | 10,516     | $1.4 billion    |

Source: FBI IC3 2025 Internet Crime Report, as reported by The Block (April 12, 2026). Figures are losses reported to the FBI, not total losses; many victims never file a complaint.

The growth has been steep. The US Treasury's Financial Crimes Enforcement Network (FinCEN), citing IC3 data, said reported US losses from digital asset investment scams rose from $907 million in 2021 to $7.2 billion in 2025\. An FBI alert from August 2023 put 2022 losses to crypto investment fraud at more than $2.5 billion.

| Year | Reported US losses to crypto investment fraud | Source                                 |
| ---- | --------------------------------------------- | -------------------------------------- |
| 2021 | $907 million                                  | FinCEN, citing IC3 (Sept. 2026)        |
| 2022 | More than $2.5 billion                        | FBI IC3 alert I-081123-PSA (Aug. 2023) |
| 2025 | $7.2 billion                                  | FBI IC3 2025 report; FinCEN            |

FinCEN's own review, published on September 3, 2026, examined 33,904 Bank Secrecy Act reports filed between September 2023 and December 2025\. It linked about $12.7 billion in financial activity to suspected digital asset scams run by overseas scam centres, with victims in all 50 states.

## How does a pig-butchering scam work, step by step?

Descriptions from the FBI, FinCEN, the Justice Department and the Federal Trade Commission (FTC) describe the same basic playbook.

### 1\. The first contact

The scammer reaches out through social media, a dating app, a messaging app, or a text that looks like it went to the wrong number. The Justice Department says operators target people through US social media and texts to US phone numbers. The tone is friendly, not salesy, and the conversation can run for weeks before money is mentioned.

### 2\. Building trust

The contact presents a polished persona: successful, attentive, often romantically interested. FinCEN says the operators use fake personas and imitation investment websites and apps. Eventually the new "friend" mentions a relative or mentor who trades crypto and offers to share the method.

### 3\. The first real crypto purchase

The victim is usually told to buy genuine cryptocurrency on a legitimate exchange first. That step makes the scheme feel safe. The scammer then asks the victim to send it to a "trading platform," which is a website or app the criminals run.

### 4\. Fake profits on a fake platform

According to FBI alerts, the fake sites let victims track their balance and show it growing quickly, which encourages larger deposits. The large numbers on the screen are invented, and the deposited coins have already been moved.

### 5\. The "tax" or "fee" trap

When the victim tries to cash out, the platform says they must first pay income tax, a "release fee," or an account-verification charge. The FBI has warned that paying these demands only adds to the loss. The account may also be "frozen" for supposed compliance reasons until more money arrives.

### 6\. The recovery scam

After contact ends, a second wave often follows. Fake recovery firms, fake lawyers or people posing as officials promise to get the money back for an upfront fee. The FBI warned in 2023 that private recovery companies cannot issue seizure orders for cryptocurrency, and in its words: "Law enforcement does not charge victims a fee for investigating crimes." IC3 logged $1.4 billion in reported recovery-scam losses in 2025.

## Who runs the scam centres?

US officials say many of these operations run from guarded compounds in Southeast Asia. The Justice Department describes compounds in Burma, Cambodia and Laos operated by affiliates of Chinese organised crime groups. It also says many of the people typing the messages are themselves trafficking victims held by armed guards.

In October 2025, prosecutors in Brooklyn charged Chen Zhi, founder and chairman of Cambodia's Prince Group, with wire fraud conspiracy and money laundering conspiracy. They filed a civil forfeiture complaint against about 127,271 bitcoin, then valued at about $15 billion. The Justice Department alleged the group ran forced-labour scam compounds. Chen has not been convicted, and the department said he remained at large when charges were announced. The US Treasury and the UK government announced sanctions against Prince Group-related entities at the same time.

FinCEN says the networks buy services such as account creation, phishing tools and laundering from online "guarantee marketplaces." Professional launderers then move proceeds through money mules and stablecoin transfers to exchanges outside the US. Stablecoin rules are tightening, as covered in Bullquill's look at the [OCC's final GENIUS Act rule](https://bullquill.com/occ-final-genius-rule-stablecoin-rewards/).

## What is the US Scam Center Strike Force?

The Scam Center Strike Force was announced in November 2025 by the US Attorney's Office for the District of Columbia, led by US Attorney Jeanine Ferris Pirro. According to a February 26, 2026 release, it includes the Justice Department's Criminal Division, the FBI, the US Secret Service, IRS Criminal Investigation and US attorneys' offices in Rhode Island and western Washington. Its targets are the scam compounds in Burma, Cambodia and Laos.

That release said the strike force had frozen, seized or forfeited more than $580 million in cryptocurrency in about three months. It also cited estimates that the scam-centre industry takes nearly $10 billion a year from Americans. Detailed reports from victims, including wallet addresses and transaction records, help investigators trace where the money went.

Other regulators are acting too. FinCEN asked banks and crypto firms in September 2026 to flag suspicious activity tied to scam centres with the key term "FIN-2026-SCAMCENTERS." In the UK, the Financial Conduct Authority is consulting on new crypto rules, discussed in our explainer on the [FCA's DeFi guidance](https://bullquill.com/fca-defi-guidance-consultations-explained/).

## Red flags: how to spot a crypto investment scam

The FTC and FBI list warning signs that show up in almost every case:

- **Investment tips from someone you met online.** The FTC says that if someone you met on a dating site or app offers investment advice or asks for crypto, it is a scam.
- **Guaranteed or "zero-risk" returns.** Real investments carry risk. Promises of quick, easy or guaranteed profit are a hallmark of fraud.
- **A platform you can only reach through their link.** Check the exact domain, look for regulatory registration, and be wary of apps that are not in official app stores.
- **Paying to withdraw your own money.** "Taxes," "release fees" or "verification deposits" demanded before a withdrawal are a classic sign.
- **Pressure and secrecy.** Being told to act fast or not tell family or your bank is a warning sign.
- **Payment demands in crypto.** The FTC puts it plainly: "Only scammers demand payment in cryptocurrency."
- **Unsolicited recovery offers.** Anyone who contacts you offering to recover lost crypto for a fee should be treated as a second scam.

Basic wallet security also helps limit damage. Never share a seed phrase or private key with anyone; our guide on [how to secure a crypto wallet seed phrase](https://bullquill.com/how-to-secure-crypto-wallet-seed-phrase/) explains why.

## Where to report crypto fraud

- **FBI Internet Crime Complaint Center:** ic3.gov. Include wallet addresses, transaction IDs, website names and message screenshots.
- **Federal Trade Commission:** ReportFraud.ftc.gov.
- **SEC** (sec.gov/tcr) and **CFTC** (cftc.gov/complaint) for investment and trading fraud.
- **Your bank and the exchange you used**, as soon as possible. FinCEN also tells victims to contact their financial institution and the US Secret Service.
- Outside the US, contact your national police cyber-crime unit and financial regulator.

## What it means

The 2025 figures show crypto investment fraud has grown into the largest fraud loss category the FBI tracks, and reported losses have grown roughly eightfold since 2021\. The scale comes from an industrial model: compounds with large workforces, purchased tools, and laundering networks that rely on fast cross-border crypto transfers.

Enforcement is increasing. Seizures by the Strike Force, sanctions on Prince Group and FinCEN's new reporting code all target the infrastructure rather than individual scammers. Whether that reduces losses will only show up in future IC3 reports. For now, the most effective protection remains recognising the script early, before the first transfer.

For more coverage of crypto regulation and enforcement, see the [Bullquill crypto section](https://bullquill.com/tag/crypto/).

## Frequently asked questions

### What is a pig butchering scam?

It is a crypto investment scam in which a stranger builds trust online, often through social media, dating apps or a 'wrong number' text, then persuades the target to deposit crypto on a fake trading platform that shows invented profits. The money is stolen, and victims are often asked to pay 'taxes' or 'fees' before they can withdraw.

### How much money was lost to crypto investment scams in 2025?

The FBI's Internet Crime Complaint Center recorded $7.2 billion in reported losses from crypto investment fraud in 2025, across 61,559 complaints. All crypto-related complaints together totalled about $11.37 billion in reported losses.

### Can a recovery company get my stolen crypto back?

The FBI warns that private recovery companies cannot issue seizure orders for cryptocurrency, and that people offering recovery for an upfront fee are often running a second scam. Law enforcement does not charge victims a fee to investigate.

### Where do I report a crypto scam?

In the US, report to the FBI at ic3.gov and to the FTC at ReportFraud.ftc.gov, and contact your bank and the exchange you used as soon as possible. Outside the US, contact your national police cyber-crime unit and financial regulator.

## Sources

- [FBI Internet Crime Complaint Center: Annual reports](https://www.ic3.gov/AnnualReport/Reports?ref=bullquill.com)
- [The Block: FBI says crypto-related fraud losses hit record $11.4 billion in 2025 (April 12, 2026)](https://www.theblock.co/amp/post/397134/fbi-says-crypto-related-fraud-losses-hit-record-11-4-billion-in-2025-with-seniors-bearing-the-brunt?ref=bullquill.com)
- [FinCEN: FinCEN identifies nearly $13 billion linked to suspected digital asset scams operated by overseas scam centers (Sept. 3, 2026)](https://www.fincen.gov/news/news-releases/fincen-identifies-nearly-13-billion-linked-suspected-digital-asset-scams?ref=bullquill.com)
- [FinCEN Alert FIN-2026-Alert005: Scam centers (Sept. 3, 2026)](https://www.fincen.gov/system/files/2026-08/FinCEN-Alert-Scam-Centers.pdf?ref=bullquill.com)
- [IRS Criminal Investigation / US Attorney's Office D.C.: Scam Center Strike Force seizures top $580 million (Feb. 26, 2026)](https://www.irs.gov/compliance/criminal-investigation/dc-scam-center-strike-force-seizures-of-cryptocurrency-from-chinese-transnational-criminals-tops-580-million?ref=bullquill.com)
- [US Department of Justice: Chairman of Prince Group indicted for operating Cambodian forced labor scam compounds (Oct. 14, 2025)](https://www.justice.gov/opa/pr/chairman-prince-group-indicted-operating-cambodian-forced-labor-scam-compounds-engaged?ref=bullquill.com)
- [FBI IC3: Increase in companies falsely claiming an ability to recover funds lost in cryptocurrency investment scams (Aug. 11, 2023)](https://www.ic3.gov/PSA/2023/PSA230811?ref=bullquill.com)
- [FBI IC3: Cryptocurrency investment schemes (Oct. 3, 2022)](https://www.ic3.gov/PSA/2022/PSA221003?ref=bullquill.com)
- [Federal Trade Commission: What to know about cryptocurrency and scams](https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams?ref=bullquill.com)
- [CoinDesk: China seeks to seize 61,800 BTC tied to $5.7 billion fraud scheme (Oct. 22, 2026)](https://www.coindesk.com/markets/2026/10/22/china-seeks-to-seize-61-800-btc-tied-to-usd5-7-billion-fraud-scheme?ref=bullquill.com)

This article is for information only and is not investment advice.