Chennai man loses Rs 10 lakh in ‘pig slaughtering’ with fake crypto scam

The scammer’s modus operandi involved psychological preparation to trick the victim into investing large sums of money in a fake cryptocurrency.

A scam that allegedly originated in China in 2019 and targets potential crypto investors, often luring them with romance or friendship, is gaining new victims in India. On May 1st, a 35-year-old businessman in Chennai reported losing Rs 10 lakh through this scam. In April, a Chhattisgarh businessman told police he had lost Rs 80,000 in the scam called Sha Zu Pan, or “pig slaughter” in Chinese.

Reportedly, the meaning of the name “pig slaughter” lies in the scammers’ modus operandi. Like a butcher would fatten a pig before slaughtering it, the online scammers – mainly Chinese women and men – make their victims invest in a fake digital coin by promising rich rewards before blocking them from accessing the funds and the account wipe clean .

TNM spoke to Ashish, the Chennai-based businessman who lost Rs 10,000 in the scam on May 1. Ashish believes this scam is an “organized investment scam” with scammers trained in psychological manipulation.

The scammers, typically Chinese women and men, contact the victim through social media, mostly Twitter or Facebook, and sometimes WhatsApp. According to Ashish, the scammers never make a simple monetary request, instead redirecting victims to links to fraudulent websites or mobile apps, convincing them to create accounts where “they can put their money” with the promise of a rich investment return.

This is what happened to Ashish*, who was contacted via Twitter direct messages by a “Hong Kong native from London by the name of Nancy” in the third week of April.

Twitter messages exchanged between Ashish and Nancy.

“Because I run an event management company, I interact with many Chinese vendors to buy goods for events. So I didn’t find her messages suspicious. We texted each other daily for the next two weeks. I told her I was married with one child and she conducted the interview very professionally, emphasizing family life and values. Through our conversations, she gained my trust,” explains Ashish.

A week later, Nancy asked Ashish if he had invested in crypto. When he said he only deposited a very small amount, she steered the conversation to crypto investing, Ashish recalls. “She told me how she made money investing in Bitcoin after moving to London when it crashed in 2020. She seemed to have tremendous knowledge about crypto and as an enthusiast I started listening and believing her when she talked about the industry. She then told me about a “new coin” she had invested in that was in the pre-IPO phase and that promised to really appreciate in value,” Ashish explained.

Perfectly designed websites, fake coins

Ashish recalls that Nancy created an aura of exclusivity around this new coin called Wind Power Energy (WPE) by saying that it can only be purchased “by invitation” as it is not yet open to the public .

“She sent me special codes to invest in WPE as it would not be public until early July and asked me not to share the codes with others as it would lead to more people buying the coin and mine Profit share decreases. She told me that if the coin went public, my investment would multiply 100x. She even told me anecdotes about her investment or her friends’ investments, with graphs showing how her “investment” had increased. She also gave me inside information on the coins.

Ashish later learned that the coin and the crypto exchange he used to purchase the coin were fake, but not before he lost $12,000 he had “invested” in WPE.

“I was led to believe that once the coin went public, my investment would multiply many times over. Nancy, the scammer, gave me anecdotal evidence with visual evidence showing how her “investment” had multiplied. She also gave me inside information about the WPE. When I asked her how she knew this, she told me that she had close sources who knew how WPE worked. The narration was so foolproof and I was won over,” Ashish tells TNM. Narration aside, the website used to run the scam was also perfect, says Ashish.

Nancy shared the link to the Letraders.org exchange site – a fake site – through which Ashish bought WPE. The Letraders.org platform gives the appearance of a credible site with features including options to buy and sell crypto, derivatives, finance and NFTs compared to legit crypto exchanges like Binance. It also includes a “market option” that lists the live prices of hundreds of crypto coins including bitcoin, altcoin, ethereum, etc.

“Letraders.org lists all major coins including Ethereum, Alt Coins, Doge Coins, Bitcoin etc. It has options to buy them too and tracks their live prices. To me, LeTraders.org looked very legitimate,” he explains.

A screenshot of Letraders.org showing live crypto coin prices.

First, Ashish transferred a sum of $1,000 from his Binance wallet to the Letraders.org wallet to buy WPEs. He even attempted to sell the coins and withdraw a hundred dollars from Letraders.org wallet, which he was initially able to do. As he saw the increase in value every day, Ashish says he invested more in WPE and got his brothers and wife to invest as well.

On April 30, when Ashish suspected fraud and sold his WPE to try to withdraw the full amount, he was barred from doing so, citing pre-IPO restrictions. He then tried to contact Nancy, who had previously blocked him on Twitter and WhatsApp, where they used to chat.

Ashish says he realized he was being scammed and lodged a complaint with the police, but for others who don’t, the scam runs deeper. “If they wait for the date when the coin is scheduled to go public and then withdraw the sum, the website says that the website has been breached by government agencies and that the investor has to pay 30% of their earnings as taxes. If the victim transfers more money, their account will be suspended and access to it will be blocked,” says Ashish. These details about the scam are just accounts and have yet to be verified.

report to the police

Several reports of similar fraud have been registered with the police in recent weeks. In April 2022, a Chhatisgarh businessman lost 81 lakh rupees after a Hong Kong resident woman convinced him to invest in a crypto coin with the promise of a triple return on investment.

Ashish says he contacted the police commissioner, who instructed him to make a report to local police. TNM saw a copy of a complaint he had lodged with the police station.

“This is just another version of online fraud with a different modus operandi. The scammers change their strategy based on current trends. Right now everyone is investing in crypto and hence has geared this digital asset to scam people. Crypto is an unregulated market and hence people should not rush into buying coins. So far we have received three to five complaints about a similar scam in Tamil Nadu. We will follow the same policies and procedures used to investigate online fraud,” a senior police officer investigating the case told TNM.

Safe Practices

Being a relatively new and growing technology development, the digital assets industry faces regulatory concerns and is therefore currently vulnerable to multiple investment scams. According to experts, there are several ways to safely invest in crypto.

1. The first point is to do your own research and understand how crypto investment returns work. There’s never a quick and easy way to grow your wealth, and anyone who promises to take your money and grow it should be viewed with suspicion, experts say.

2. Be careful when making friends or talking to people online. Do not give out information (personal or financial) lightly.

3. Expanding on the first point, investors and potential investors should be wary of online ads that say “small investments and huge returns” on crypto or “steady returns with no losses.” Crypto is a volatile industry and prices are bound to fall and rise sharply.

4. Don’t let anyone handle your money. Do not transfer money to accounts whose holders promise to multiply your wealth. Stay in control of all your assets, especially digital assets, and don’t delegate this task to someone else.

5. Invest only through well-known and creditworthy platforms like Binance and CoinBase. Most of these fake crypto exchange sites are well designed and look legit apart from minor differences like URL spelling. This is useful to avoid phishing websites impersonating well-known online exchange platforms.

6. Don’t click on links online that have been sent by people you don’t know personally.

7. Try to get as much information as possible about the scammer’s identity, location, etc. when he/she contacts you. Then report it to the police.

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