In a report released by Cyvers, a prominent Web3 security firm, "pig butchering" scams accounted for about $3.6 billion in losses in the crypto space in 2024 alone. This alarming figure has caught the attention of crypto experts, who have raised concerns about the escalating threat these scams pose to the crypto community. 

Popular TV host Dr. Phil from the "Welcome to Fraud Factory" show provides the best explanation of pig butchering. He described it in an X post that reads, “What we’re talking about is a new and very sophisticated scam where predators stalk their prey, fatten them up, and go in for the kill.” 

Following Phil’s description, we can understand how these types of scams work.

At the initial stage, the scammers engage potential victims through unsolicited messages, often luring them into elaborate fake investment schemes. 

Once trust is established, they gradually encourage victims to invest larger sums of money, typically in cryptocurrencies like Tether (USDT), through less regulated exchanges such as Binance and Crypto.com. The concluding part of the scam is where the butchering happens and victims realize that it was all fake all along. 

Looking at the stats in Cyvers' report, it's revealed that the number of cyber attacks rose by 40% in 2024 compared to the previous year, with 165 incidents leading to losses amounting to $2.3 billion. 

While this represents a decline from the peak fraud levels seen in 2022, expert analysts highlighted that the complexity and frequency of these scams have increased.

Notably, access control breaches accounted for the majority of losses, totaling $1.9 billion across 67 incidents. Other significant attack vectors included smart contract vulnerabilities and address poisoning assaults, which resulted in losses of $456.8 million and $68.7 million, respectively.

Following the details in the report, the first quarter of 2024 saw an unprecedented number of incidents—53 in total—marking it as the most active period for scams throughout the year. The third quarter recorded the highest financial losses at around $760 million, while activity dwindled significantly in the fourth quarter.

From the report’s account of all the blockchain that were affected by pig butchering, Ethereum emerged as the primary blockchain exploited by these scammers. The report detailed that approximately 150,000 addresses and 800,000 transactions were involved in these scams on Ethereum alone.

Some of the high-profile incidents that highlighted the vulnerabilities within the crypto ecosystem in 2024 include:

  • WazirX Hack: India’s largest cryptocurrency exchange suffered a breach resulting in losses of $235 million due to vulnerabilities in its multi-signature wallet system.
  • DMM Exchange Breach: Hackers compromised a private key associated with DMM's Bitcoin hot wallet, leading to a loss of $305 million.
  • Radiant Capital Incident: Attackers exploited compromised devices linked to Radiant Capital, resulting in a loss of $50 million.
  • BingX Exploit: This exchange lost $52 million when hackers accessed its hot wallets and transferred funds across various networks.

Despite the significant losses incurred throughout the year, recovery efforts yielded some positive outcomes. Approximately $1.3 billion was returned to victims through various means, including on-chain investigations by experts such as ZachXBT and bug bounty programs aimed at identifying and mitigating vulnerabilities.

Crypto Scam Trends in 2024: From Pig Butchering to AI Deception | HODL FM
Explore crypto scam trends in 2024, including ‘pig butchering’ and…
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