WASHINGTON, D.C.—If it sounds too good to be true, it most likely is.
During an MLS Forum at the National Association of REALTORS® (NAR) Legislative Meetings, Senior Counsel and Director of Legal Affairs Charlie Lee touched on just that, warning real estate professionals of a new cryptocurrency scam called ‘Pig Butchering.’
The U.S. Secret Service is aware of at least 40 real estate professionals who have fallen victim to this cryptocurrency scam.
“It is likely to grow, and we just want to alert all of you of this scam, so that you can make sure that your members are aware and your colleagues are aware,” Lee said, addressing the ballroom packed with real estate professionals.
Curiosity killed the cat
According to federal investigators, scammers pose as high-net-worth individuals looking to buy a home in all-cash. Throughout the course, the scammer builds relationships with their real estate professionals to the point where they are asked how they built their wealth.
The scammer points to cryptocurrency.
Over time, as the relationship builds, the real estate professional will express interest in the space, and the fraudster will then lead the real estate agent to a website or platform featuring “a lot of cryptocurrencies that resemble legitimate cryptocurrency,” Lee said.
After small investments and subsequent returns, the real estate professional will “cash out” and “liquidate more assets, which often, or can include their retirement accounts. Then, as you can imagine, they lose all of their money,” Lee explained.
According to Wikipedia, pig-butchering scams originated in 2016 or earlier as a regional scam in China, originally finding their victims on dating sites. The unpleasant term comes from an analogy comparing the initial phase of gaining the victims’ trust to the fattening of pigs before slaughtering them.
Avoiding these scams largely comes down to basic online safety, like not sharing personal information and independently verifying information. The Secret Service specifically urges anyone who is suspicious of an online interaction around crypto to conduct simple internet searches for the crypto tokens, platforms or companies.
In 2024, the FBI Internet Crime Complaint Center (IC3) reported potential cybercrime losses upwards of $16.6 billion, up 33% from 2023.
For the highest chance of recovery after suspected or actual cyber fraud incidents, it’s important to report incidents to IC3.gov within 72 hours. Last year, IC3’s recovery asset team recouped nearly all of a homebuyer’s $956,342 in closing funds, which they wired after receiving a spoofed email from their supposed real estate agent.
