OXFORD, United Kingdom, September 18, 2023 (GLOBE NEWSWIRE) — Sophos, a global leader in innovating and delivering cybersecurity as a service, today released findings on a large shā zhū pán (pig slaughter) operation involving fake trading pools Cryptocurrencies were used (liquidity pools) to steal more than $1 million. The report, “Latest Evolution of ‘Pig Butchering’ Scam Lures Victim in Fake Mining Scheme,” details the story of one of the scammed victims in the pools named *Frank and how he lost $22,000 in a week after “someone” did so To be “Vivian” on the dating app MeetMe, he contacted him.
After Sophos three months.
This scam takes advantage of the largely unregulated world of cryptocurrency trading applications in decentralized finance (DeFI). Such applications create “liquidity pools” of different types of cryptocurrencies, which users can then access to trade from one cryptocurrency to another. Those who participate in the pool receive a percentage of the fee paid when a trade is made, resulting in a tempting return on investment. To join a pool, participants must first sign an online smart contract – a contract that gives another account (usually the pool’s operators) permission to access participants’ wallets to facilitate trading. Fake pools, which pig slaughterhouses are increasingly using to siphon funds from targets, work in the same way. However, unlike legitimate pools, these scammers eventually “pull the rug out” and empty the entire liquidity pool for themselves.
“When we first discovered these fake liquidity pools, they were rather primitive and still in development. Now we’re seeing Sha Zhu Pan scammers take this particular form of cryptocurrency fraud and seamlessly integrate it into their existing tactics, such as luring targets via dating apps. Very few understand how legitimate cryptocurrency trading works, so it is easy for these scammers to defraud their targets. There are now even toolkits for this type of fraud, making it easier for various pig slaughterhouses to add this type of crypto fraud to their arsenal. While Sophos tracked dozens of these fraudulent “liquidity pool” sites last year, we are now seeing more than 500,” said Sean Gallagher, senior threat researcher at Sophos.
Sophos X-Ops first learned about this liquidity mining operation from a victim named Frank. Frank had connected with a scammer on the dating app MeetMe who hid behind the persona of Vivian, a German woman who supposedly lives in Washington, DC for work. For weeks, Frank chatted with Vivian, who mixed her romantic promises with persistent attempts to convince Frank to invest in crypto.
Finally, Frank opened a Trust Wallet account (a legitimate app for exchanging dollars for cryptocurrency) and connected to the liquidity pool site link recommended by Vivian. In reality, the pool site was a scam site that used the Allnodes brand, an established decentralized finance platform provider, as a cover. Between May 31 and June 5, Frank invested $22,000 in the program. Just three days later, the scammers emptied Frank’s digital wallet. Frank, wanting to get his money back, turned to Vivan, who claimed he needed to invest even more in the pool to get his money back and reap the “rewards.” While waiting for his bank to approve a money transfer to Coinbase, Frank started researching and came across an article about liquidity mining from Sophos. At this point, Frank asked Gallagher for help.
Even after Gallagher instructed Frank to block Vivian, she eventually found him on Telegram and continued her attempts to entice him to “continue her investment,” even going so far as to send a long, emotional letter that most likely was created by a generative AI app.
“What makes these types of scams particularly tricky is that they do not require any malware to be installed on the victim’s device. This isn’t even a fake app like some other CryptoRom scams have been. This entire fake liquidity pool was managed through the legitimate Trust Wallet app. At one point, Frank even tried to contact Trust Wallet support to get his money back, but he connected to a fake support contact from the fraudulent liquidity pool site. There is no legal or other regulation of these pools for these crypto apps. These scams are successful solely through social engineering and the scammers are persistent. Vivian continued trying to contact Frank for weeks after he blocked her on WhatsApp.
“The only way to protect yourself from these scams is to be vigilant and know that they exist and how they work. That’s why Frank wanted to share his story. Users need to be wary of people they have nothing to do with suddenly contacting them on a dating app or social media platform, especially if the “person” making contact initiates the conversation wants to move to a platform like WhatsApp and then talks about investing in cryptocurrencies. said Gallagher.
Sophos has shared its data on this case with Chainalysis and Coinbase, as well as other cryptocurrency threat intelligence experts, all of whom continue to investigate. Anyone who believes they are a victim of pig slaughter or liquid mining scams can contact Sophos at any time. You should also contact local law enforcement for assistance.
For more information about the rise in liquidity mining scams, see “Latest development of ‘pig slaughter’ scam lures victims of fake mining scheme” on Sophos.com.
*Name has been changed to protect the victim’s privacy.
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About Sophos
Sophos is a global leader and innovative provider of advanced cybersecurity solutions, including managed detection and response (MDR) and incident response services, as well as a broad portfolio of endpoint, network, email and cloud security technologies that help organizations defend against cyberattacks support. As one of the largest pure-play cybersecurity providers, Sophos protects more than 500,000 organizations and more than 100 million users worldwide from active attackers, ransomware, phishing, malware and more. Sophos’ services and products are connected through the cloud-based management console Sophos Central and supported by Sophos X-Ops, the company’s cross-domain threat intelligence unit. The intelligence of Sophos Sophos provides cybersecurity-as-a-service for organizations that need fully managed, turnkey security solutions. Customers can also manage their cybersecurity directly with Sophos’ security operations platform or use a hybrid approach by complementing their internal teams with Sophos’ services, including threat hunting and remediation. Sophos sells worldwide through reseller partners and managed service providers (MSPs). Sophos is headquartered in Oxford, UK. For more information, visit www.sophos.com.
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