Key Takeaways:
- The Australian Securities and Investments Commission (ASIC) obtained court orders to shut down 95 companies linked with pig-butchering scams.
- The scams combine romance scams and crypto investment promises to defraud victims.
- ASIC is alerting a “hydra-like” operation of foreign-based cybercriminals.
- The victims are typically invited on social media or messaging platforms.
- ASIC’s investigation involves cross-border coordination with law enforcement agencies and financial regulators.
Australia took a major step towards tackling crypto-finance-based crime by targeting a high-risk and increasing form of fraud known as “pig butchering”. The Australian Securities and Investments Commission (ASIC) announced this week it had been issued federal court orders to shut down 95 Australian companies suspected of enabling or participating directly in these advanced fraud schemes.
What Are Pig Butchering Scams?
Also known as “pig butchering” because of the strategy of “fattening up” a pig prior to slaughtering it, these scams involve cybercriminals gradually building trust with victims—typically weeks or months—before persuading them to invest in bogus cryptocurrency schemes. Once the victim transfers huge sums of money, the scammers disappear, leaving them with nothing.
This scam usually starts via unsolicited social media messages, dating websites, or messaging platforms like WhatsApp and Telegram. The scammer will then proceed to engage in a romantic or casual relationship with the victim before introducing the “suitable investment opportunity,” which is nothing but a front for an unlawful crypto exchange or trading software.
ASIC’s Operation and Court Orders
ASIC has moved decisively to cut off the spread of these schemes, commonly masked by seemingly legitimate company registrations. The court orders ASIC has secured effectively deregister 95 companies, all suspected to be shell companies under the control of cybercrime syndicates.
ASIC Deputy Chair Sarah Court called the scam networks “hybra-headed”, meaning they are resilient and rapidly mutating into new shapes when one gets cut off.
The companies, although lawfully registered in Australia, had no genuine commercial operations and were rather used for the washing of scam money or lending authenticity to scam platforms. Some companies had links with established scam operations overseas, particularly in Southeast Asia.
International Nature of the Crime
ASIC noted that the scams are not Australian problems, but one component of an international network of organized crime. The scammers frequently target Australia from overseas jurisdictions, behind Australian-registered cars and pretend directors to conceal their true identities and to present their victims with an aura of legitimacy.
This has caused ASIC to work closely with foreign law enforcement agencies, as well as local agencies such as AUSTRAC (Australia’s anti-money laundering regulator), the Australian Federal Police, and the Australian Transaction Reports and Analysis Centre.
Use of Nominee Directors and False Identities
One of the practices employed increasingly by these crime syndicates is nominee directors—who are bribed or threatened to act for companies to provide the company with a facade of legitimacy. Some of the directors were unaware that they were being taped or had their identity hijacked. ASIC has therefore examined the identification verification process within the company incorporation process.
ASIC has now sought more monitoring of corporate service providers, especially those offering “quick and simple” company formation services online. Growing pressure is also on ASIC’s registry systems to strengthen due diligence and prevent misuse.
Effects on Victims
Financial and psychological cost to pig-butchering scam victims is very high. Victims can:
- Undergo loss of their entire lifetime savings after being promised high-risk-free returns.
- Feel embarrassed and reluctant to report the crime due to the emotional manipulation involved.
- Be repeatedly targeted after being placed on “sucker lists”—shared databases among scammers containing information about previous victims.
ASIC is also asking all Australians to be careful when they get unsolicited investment advice or online romantic relationships with strangers. ASIC is also asking individuals to invest only on licensed sites and check any financial service provider’s credentials through its official portal.
More News: $5.5 Billion Stolen: Pig Butchering Scams Explode in Crypto, Cyvers Report Reveals
