By now, most people involved in crypto are at least familiar with the concept of pig butchering, if not aware that it’s a growing problem with widespread consequences.
However, what most won’t know is that pig butchering is expanding so quickly and minting new millionaires so fast that it’s given rise to two entirely new industries: escrowing for pig butcherers and selling hostages onward from one pig butcher to another.
How does pig butchering work?
If you’re unfamiliar with what pig butchering is, it’s a diabolical and violent scam that works like this:
- An individual, usually from China, but occasionally from Eastern Europe or Southeast Asia, is lured to Southeast Asia (the biggest offenders reside in Cambodia, Laos, Thailand, and Myanmar) with promises of a job offer or modeling work.
- Once the person arrives in Southeast Asia, they’re hurriedly shuffled to a remote village or city where they’re taken hostage. Sometimes this even means they’re shackled and not allowed to go outside.
- Upon being taken hostage the individual is forced to bait Westerners into giving them crypto through romance scams, jobs offers, or other means.
- As this is happening, the hostage’s family is told that their loved one has been taken and a ransom is demanded for their freedom. The ransom is usually too large for the family to afford.
Read more: Project Brazen links KuCoin to billions in pig butchering scams
A new business is born
The pig butchering industry has grown rapidly over the past five years, with billions of dollars flowing into Southeast Asia via scam centers with thousands of hostages being held.
These massive buildings and industrial parks openly operate without threat of being shut down due to the government officials they’re able to bribe and the taxable revenue they bring in.
Most often, the leaders of these syndicates are Chinese nationals and/or members of the Triads (Chinese mafia).
However, as the industry has grown, so have its needs.
In a report from Bitrace, the ways in which pig butchering scammers have begun to rely on third parties for help in acquiring hostages is detailed along with a lucrative new side hustle of selling hostages to one another.
Guaranteed sales
The report shows examples of “guaranteed sales,” where pig butchering scammers and those who lure in hostages use a third-party escrow service so they can be assured that neither criminal enterprise will rip the other one off.
Scammers and those who lure their hostages want guarantees that neither will rip the other off.
Read more: China executes four more in pig butchering scam crackdown
In the image above, a pig butchering group by the name of Tianhe International puts 18,000 USDT into escrow with a company called Zhencheng Guarantee.
Once the hostage exchange is completed the escrow service is able to walk away with almost $1,000 simply for holding the money for the scammers until the transaction is completed.
It’s unknown how large the scammer escrow business is within the pig butchering economy, but no doubt it’s growing, with those providing the service having to do almost nothing but hold funds and wait for the green light.
This means it’s far less risky than for those conducting the actual pig butchering or those recruiting new hostages.
Secondary sales
Another — and far more disgusting — example of how pig butcherers earn extra cash is by selling hostages forward.
The reason for the secondary sales could range from wanting extra income that month, a new individual or company spinning up a pig butchering business, or a pig butcherer winding down their business to move into other lucrative, less illegal industries like gambling or harvesting jade and rare woods for export.
Regardless of why, there’s evidence of the secondary market having sales regularly. The below image shows evidence of Tianhe International purchasing hostages from another pig butcherer called Wanxiang Group.
Another example of how pig butcherers earn extra cash is by selling hostages forward.
Despite Chinese law enforcement putting a stop to numerous pig butchering operations and executing dozens of leaders responsible for keeping thousands of people trapped in Cambodia and Laos, the criminal activity shows no sign of slowing down.
Bitrace was able to prove that Tianhe International was earning millions and millions of dollars in revenue every month before multiple wallet addresses were frozen.