The multibillion-dollar “pig-butchering” scam, once dismissed as a consumer-fraud issue, is now being flagged as a national security threat. In a recent podcast, Chainalysis’s head of national security intelligence, Andrew Fierman and former prosecutor Erin West, founder of Operation Shamrock, warned that the crime model has escalated far beyond simple online deception.
West stressed that the scale of the threat means everyone touching financial systems must be aware of the risks.
“So you need to be prepared to understand the threat and the gravity of what’s happening on a national security level,”
she said.
Often beginning as online friendships or romantic connections, pig-butchering scams lure victims into fake cryptocurrency investment platforms, then drain their funds.
A growing and sophisticated criminal network
Fierman and West described how organized crime networks across Southeast Asia run dormitory-style scam compounds staffed by trafficked workers. These workers are coerced into building emotional bonds with unsuspecting victims and steering them into fraudulent crypto schemes.
The numbers continue to soar. The U.S. Department of Justice seized $112 million in crypto linked to these scams in 2023. Chainalysis data shows a nearly 40% spike in pig-butchering activity in 2024, contributing to over $9.9 billion in total scam revenue.
A lesser-known twist is the “double scam.” After victims lose money, fake recovery firms often contact them pretending to help retrieve lost funds—only to steal even more.
Despite the complexity, Fierman said blockchain technology offers regulators and exchanges an opening to intervene.
“And the transparency of the blockchain gives that opportunity to potentially disrupt at the point of cash out,”
he noted.
AI is making the scams more convincing
Artificial intelligence is adding another layer to the threat. Chainalysis found that AI-enabled scams were significantly more profitable than traditional scams in 2025. Fraudsters can use AI-generated text, fake identities, voice cloning and deepfakes to maintain convincing relationships with victims at a much larger scale.
A scammer no longer needs to manually create every message or maintain every online persona. Automated tools can help generate conversations, create convincing profiles and identify potential victims. The result is a fraud model that can be scaled much more like a technology business than a traditional confidence scam.
Also Read: California Authorities Crack Down on Crypto Scams
Governments are stepping up
Authorities are now responding with a more aggressive strategy. On November 12, the U.S. DOJ launched a “Scam Center Strike Force” to target Chinese-linked criminal groups operating crypto-fraud networks in Southeast Asia.
In January, Authorities in Central Jakarta arrested 20 suspects linked to an elaborate crypto romance scam that preyed on middle-class professionals across Southeast Asia. In August, APAC law enforcement teams, working with Chainalysis, OKX, Tether and Binance, froze $47 million believed to be linked to pig-butchering operations.
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