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Crypto and Investment Scams: Pig Butchering and Bitcoin ATM Scams

Independently fact-checkedBy Recording Law Editorial Team20 min read

Independently fact-checked against primary sources (last audited October 3, 2026). · 12 primary sources cited on this page. How we verify our legal content

Crypto and Investment Scams: Pig Butchering and Bitcoin ATM Scams

A crypto investment scam usually starts with a friendly stranger, not a sales pitch. Someone you met by text, on social media or on a dating app builds trust over weeks, then shows you a trading platform where your "investment" seems to grow. The platform is fake. When you try to withdraw, you are told to pay taxes or fees first, and the money never comes out. The FBI's 2025 Internet Crime Report says cryptocurrency investment fraud was the largest source of reported financial losses to Americans in 2025, at $7.2 billion.

If it is happening to you right now: stop sending money, and do not pay any "fee," "tax" or "deposit" to unlock a withdrawal. Contact the crypto exchange or crypto ATM operator you used, report to the FBI at ic3.gov, and save every wallet address, transaction ID and message. Crypto transfers are very hard to reverse, so be wary of anyone who promises to get your coins back for a fee.

Information last verified on October 2, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers US federal law and federal agency guidance on crypto and investment scams: the federal wire fraud statute (18 U.S.C. § 1343), the securities antifraud rule (15 U.S.C. § 78j(b) and SEC Rule 10b-5), the Commodity Exchange Act's antifraud provision (7 U.S.C. § 9), and the Justice Department's remission rules for forfeited property (28 C.F.R. Part 9). It does not cover state law, including state laws on cryptocurrency ATMs and kiosks, state securities laws, the tax treatment of scam losses, or scams outside the United States.

What is a pig butchering scam?

A pig butchering scam is a relationship investment scam. The scammer spends time building a friendship or romance, then convinces you to invest, usually in cryptocurrency, through a website or app the scammer controls. The scammer lets your balance appear to grow, encourages bigger deposits, then keeps everything.

In their joint investor alert, the SEC, the CFTC, FINRA and NASAA say these schemes are "sometimes referred to by various terms including romance scams, 'cryptocurrency' investment scams, financial grooming scams, and even the distasteful term 'pig butchering scams.'"

The Relationship Investment Scams investor alert was issued on September 10, 2024, by the SEC's Office of Investor Education and Advocacy, the CFTC's Office of Customer Education and Outreach, FINRA and the North American Securities Administrators Association (NASAA).

The FBI describes who runs these operations. Its 2025 Internet Crime Report says cryptocurrency investment fraud is "largely perpetrated by organized criminal enterprises based in Southeast Asia using victims of human trafficking as forced labor." The person messaging you may be working from a script.

How the scam usually unfolds

  1. Unsolicited contact. A text, an app message or a social media contact from someone you do not know. The person is friendly and in no hurry to talk about money.
  2. Trust. Regular conversation that builds a friendship or romance, sometimes with mentions of success at crypto or trading.
  3. The pitch. The person offers to teach you, or to share a "strategy," and points you to a specific trading website or app.
  4. Fake profits. You deposit a small amount, and the platform shows gains. The FBI says victims "are shown fake profits and offered loans to encourage larger investments."
  5. A small withdrawal that works. The joint alert warns that scammers "might even allow a target to withdraw a portion of their 'profits'" to build confidence.
  6. The trap. You try to take out a larger amount and cannot. In the FBI's words, "when the victims try to withdraw their money, they will be charged taxes and fees."
  7. The second hit. After the loss, someone offers to recover your money for a fee. The FBI notes that victims "are also targeted in recovery scams, claiming to help recover lost funds."

Fake trading platforms and the withdrawal fee trick

The platform is the heart of the scam. It may look professional, show live charts and even have a customer service chat. None of it means your money is there. The FBI says victims are "enticed to send cryptocurrency to fake investment scam platforms or apps."

An app in a major app store is not proof either. The joint alert says "just because an app is available on a well-known app store doesn't mean that the app itself ... [is] legitimate."

The clearest sign is what happens when you ask for your money. The joint alert puts it this way:

"But when the target wishes to withdraw their funds, the fraudsters often come up with an excuse why that isn't possible, say more money is required, or tell the target for the first time that they must pay more to cover fees or taxes."

Do not pay a fee, tax, deposit or "verification" charge to unlock a withdrawal. That payment does not release your money. It is one more payment to the scammer.

Watch out: The FTC says "Only scammers demand payment in cryptocurrency. No legitimate business is going to demand you send cryptocurrency in advance." It also says "Only scammers will guarantee profits or big returns." See the FTC's guide to cryptocurrency and scams.

Warning signs of a crypto or investment scam

  • Unsolicited contact that turns to investing. The joint alert's advice: "don't make investment decisions based on the advice of anyone who makes unsolicited contact with you online or through an app or text message."
  • Romance plus investing. The FTC says to "Never mix online dating and investment advice," and that if someone you meet on a dating site or app wants to show you how to invest in crypto, "that's a scam."
  • A platform someone else chose for you, especially one you cannot find through an established, regulated firm.
  • Guaranteed or unusually steady returns. The FTC reminds investors that "All investments come with the risk that you'll lose money."
  • Pressure to pay with crypto, by wire or at a bitcoin ATM. The joint alert says "An investment might not be legitimate if the investor is required to pay for it with crypto assets."
  • New fees or taxes before you can withdraw.

Bitcoin ATM and crypto kiosk scams

A crypto ATM (also called a bitcoin ATM or crypto kiosk) turns cash into cryptocurrency and sends it to a wallet address. The FTC describes scammers sending people to an ATM with a QR code "which directs the payment right into their digital wallet," after which the money is gone. The CFTC warns that with these payment methods, "The transfer is often immediate and irreversible."

a sealed envelope on a doormat inside a front door

Crypto ATMs are not used only in investment scams. The FTC's warning covers anyone who tells you to use one to protect your money or fix a problem, which is the script in many impostor scams.

The numbers, each from a separate report:

SourceWhat it measuredFigure
FBI IC3, 2025 Internet Crime ReportComplaints involving crypto ATMs or kiosks, calendar year 202513,460 complaints and about $389 million in reported losses (up 58% in losses from 2024)
FBI IC3, 2025 Internet Crime ReportThe same category, people 60 and older6,188 complaints and $257,466,130 in reported losses
FinCEN Notice FIN-2025-NTC1 (August 4, 2025), citing IC3Kiosk complaints in 2024"more than 10,956 complaints," with "reported victim losses of approximately $246.7 million"
FTC Data Spotlight (September 3, 2024)Fraud losses at bitcoin ATMs reported to the FTCLosses increased "nearly tenfold from 2020 to 2023" and topped "$65 million in just the first half of 2024"; the median loss reported in that half-year was $10,000

These come from different datasets (FBI complaints versus FTC reports) and different periods, so they should not be added together.

The Financial Crimes Enforcement Network's kiosk notice also reports, citing FTC data, that "people aged 60 and over were more than three times as likely as younger adults to report a loss using a CVC kiosk." That notice is addressed to financial institutions, to help them spot and report suspicious kiosk activity; it is not a rule that gives consumers a refund right.

The one sentence to remember: "No government agency, legitimate financial institution, or reputable company will instruct you to move money using crypto ATMs, gift cards, or couriers." That is the CFTC, in its August 2026 customer advisory Pause Before You Pay. The FTC's Bitcoin ATM data spotlight adds: "Don't believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or move money to protect it or fix a problem."

State law. Some states have passed laws on crypto kiosks. The FTC notes that crypto payments lack card-style legal protections, "But some states have passed laws that might help you." Those rules vary by state and are not covered on this page, so check your state's law or ask your state attorney general's office. If you were scammed through a government impostor at a kiosk, see our guide to government impersonation scams.

How to check a broker, adviser or investment firm

Before you send money to anyone offering an investment, look them up yourself.

  • FINRA BrokerCheck (brokercheck.finra.org). The joint alert says: "Use FINRA BrokerCheck to research investment professionals and brokerage firms."
  • The SEC's Investment Adviser Public Disclosure site (adviserinfo.sec.gov), for looking up investment advisers.

Two cautions. First, the person who contacted you online is usually not a registered professional at all, and the platform they pushed is usually not a registered firm, so the search is mainly useful for confirming that something is missing. Second, scammers can borrow a real firm's name, so reach any firm you find through contact details you look up yourself, never through a link or number the person sent you.

What to do if you sent money to a crypto scam

Act quickly, and do it in this order.

hands writing notes in a notebook beside a phone

  1. Stop sending money. Do not pay any withdrawal fee, tax, deposit, or "account unlock" charge. Stop contact with the person and the platform.
  2. Contact the exchange or crypto ATM operator you used. The FTC tells crypto payers: "Contact the cryptocurrency exchange or ATM operator immediately. Tell them it was a fraudulent transaction. Ask them to reverse the transaction and refund your money." Use contact details you find yourself.
  3. If money left your bank by wire or transfer to buy crypto, call your bank too. A bank wire or transfer may have its own recall process; see how to get money back after a scam for the rules by payment method.
  4. Report to the FBI at ic3.gov. The CFTC's advisory says to "report internet-enabled fraud to the FBI at IC3.gov," and the Justice Department's Scam Center Strike Force asks anyone defrauded by a Southeast Asian scam center scheme to "contact the FBI Internet Crime Complaint Center at ic3.gov."
  5. Report to the investment regulators. The CFTC says "Customers may submit a complaint to the Commodity Futures Trading Commission at CFTC.gov/complaint." The joint alert says to "Report possible securities fraud to the SEC," and the FTC's crypto guide lists the SEC's tip site at sec.gov/tcr. You do not need to know whether your scam involved a security or a commodity to report; our where to report a scam guide lists the SEC, CFTC, FINRA and state securities regulator channels.
  6. Report to the FTC at ReportFraud.ftc.gov, as the FTC's Bitcoin ATM spotlight advises.
  7. Save the evidence. Wallet addresses, transaction IDs (hashes), receipts from the ATM, screenshots of the platform and your account balance, the website address, and the full message history with the person.

Pro tip: If the FBI contacts you to say you are being scammed, take it seriously. Under Operation Level Up, launched in January 2024, the FBI "identifies victims of cryptocurrency investment fraud and notifies them of the scam." The FBI's 2025 report says 3,780 victims were notified in 2025 and that "78% of those victims were unaware they were being scammed." Verify any such call by contacting the FBI yourself through a number you look up, because scammers also impersonate the FBI.

Can you get crypto back after a scam?

Sometimes, but rarely, and never by paying a stranger to try. Be honest with yourself about the odds.

Crypto transfers are generally irreversible. The CFTC's advisory says: "Your transfer to an address cannot be reversed, no matter how large the value being sent." The FTC adds that "Cryptocurrency payments typically are not reversible. Once you pay with cryptocurrency, you can usually only get your money back if the person you paid sends it back." The joint investor alert is blunter: "If you wire money outside of the United States or use crypto assets for an investment that turns out to be a scam, you likely will never see your money again."

Federal seizures do happen. The Justice Department's Scam Center Strike Force, formed in 2025 by the US Attorney's Office for the District of Columbia with the Criminal Division, the FBI and the Secret Service, targets Southeast Asian crypto scam operations. Its page says (as viewed October 2, 2026): "The Strike Force Crypto Seizure team has restrained $938,460,156.82 in crypto currency from these schemes. The Crypto Seizure team is focused on recovering stolen funds and returning them to victims." Restrained funds are not the same as money returned, and the page does not say which victims will be paid or when.

How seized money reaches victims: DOJ remission

When the government forfeits property connected to a crime, victims can sometimes ask for a share through a process called remission. The rule is 28 C.F.R. § 9.8, which "applies to victims of an offense underlying the forfeiture of property, or of a related offense," who do not already own the forfeited property. Three limits matter:

  • It only applies to certain forfeitures. Section 9.8 "applies only with respect to property forfeited pursuant to statutes that explicitly authorize restoration or remission of forfeited property to victims."
  • It is tied to a specific case. You must be a victim of the offense behind that particular forfeiture, or of a related offense, not of crypto scams in general.
  • You must prove your claim. Under 28 C.F.R. § 9.5(a)(3), "The petitioner has the burden of establishing the basis for granting a petition for remission."

The Justice Department lists its large remission matters on its Large Remission Matters page, with the administrator for each. Crypto-related matters appear there, including BC Group, a case captioned United States v. One Tether Address Containing 3,400,000, et al., No. 3:24-cv-01463 (N.D. Cal.). The page says the Department "is the sole decision-maker on petitions."

Remission is free. The same page says: "The Department and its Remission Administrators will never ask for payment to participate in or receive funds from the remission process. If you are asked to pay a fee from an unknown source it is a fraud."

Recovery scams target crypto victims

In 2025, the FBI's IC3 received 10,516 complaints about recovery scams, with $1.4 billion in reported losses. Some of those reported losses may include the original scam. People who have just lost crypto get calls and messages from "asset recovery" firms, "blockchain investigators," fake lawyers and fake government agents.

Never pay upfront to get crypto back. Our guides on where to report a scam and how to get money back after a scam quote the FBI and FTC warnings on fake law firms and recovery services. If you are thinking about hiring a lawyer, read when a lawyer helps after a scam first, including how to spot a fake one.

Is a crypto scam a crime? The federal laws involved

Yes. Several federal laws reach these schemes. They are mainly tools for prosecutors and regulators, and none of them gives you an automatic refund.

LawWhat it prohibitsEnforced by
Wire fraud, 18 U.S.C. § 1343Using interstate or foreign wire, radio or television communication for a scheme to defraudFederal criminal prosecutors
Securities Exchange Act § 10(b), 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5Deception in connection with the purchase or sale of a securitySEC
Commodity Exchange Act, 7 U.S.C. § 9(1)Manipulative or deceptive devices in connection with a swap or a contract of sale of a commodityCFTC

Wire fraud. 18 U.S.C. § 1343 covers anyone who, "having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce" in carrying out that scheme. The maximum is 20 years in prison, rising to 30 years and a fine of up to $1,000,000 when the offense affects a financial institution or involves certain disaster benefits.

Securities fraud. 15 U.S.C. § 78j(b) makes it unlawful "To use or employ, in connection with the purchase or sale of any security ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe." The SEC's Rule 10b-5 spells that out:

"(a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary ... not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security."

Commodities fraud. 7 U.S.C. § 9 makes it "unlawful for any person, directly or indirectly, to use or employ ... in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery ... any manipulative or deceptive device or contrivance, in contravention of such rules and regulations as the Commission shall promulgate."

Whether a particular fake platform involved a "security," a "commodity," or neither depends on the facts and is decided by regulators and courts case by case. You do not have to answer that question to report. If a scammer can be identified and is prosecuted, federal restitution rules may apply; see how to get money back after a scam.

Who is most at risk

Anyone can be targeted, and the people who lose money are not careless; scammers are professionals. But older adults report especially heavy losses. In 2025, people 60 and older filed 13,685 cryptocurrency investment fraud complaints with the IC3 and reported $2,763,921,910 in losses, and they accounted for 6,188 of the 13,460 crypto kiosk complaints. If you are helping a parent or relative, see our guide to elder fraud.

Last updated: October 2, 2026.

This article is general legal information, not legal advice. It covers US federal law and federal agency guidance as verified on October 2, 2026. For your specific situation, contact the crypto exchange, ATM operator or bank you used, the agencies named above, or a lawyer licensed in your state.

Frequently Asked Questions

What is a pig butchering scam?

It is a relationship investment scam. A stranger builds trust online, then steers you to a fake crypto trading platform that shows invented profits and blocks withdrawals until you pay more. The SEC, CFTC, FINRA and NASAA call these relationship investment scams in their September 10, 2024 joint alert.

The platform says I have to pay taxes or fees before I can withdraw. Should I pay?

No. The SEC, CFTC, FINRA and NASAA describe a sudden demand for fees or taxes before a withdrawal as a classic sign of a relationship investment scam, and the FBI describes the same trap. Paying does not release your money.

How much do Americans lose to crypto scams?

The FBI's 2025 Internet Crime Report lists $7.2 billion in reported losses to cryptocurrency investment fraud in 2025, which the report calls the highest source of financial losses to Americans, and about $389 million in losses involving crypto ATMs or kiosks.

Can I get my money back from a bitcoin ATM scam?

It is difficult. The CFTC says a transfer to a crypto address cannot be reversed. Contact the ATM operator right away and ask it to reverse the transaction, report to ic3.gov, and check whether your state has a crypto kiosk law that might help.

Can the government get my stolen crypto back?

Sometimes. The Justice Department seizes scam funds, and victims of the offense behind a particular forfeiture, or of a related offense, can petition for a share through remission under 28 C.F.R. § 9.8. It applies only to specific cases, the petitioner must prove the claim, and the Department never charges a fee.

Someone says they can recover my lost crypto for a fee. Is it real?

Treat it as a scam. The FBI's IC3 says it does not work with law firms or crypto services to recover lost funds, and the Justice Department says its remission process never charges a fee. In 2025 the IC3 logged $1.4 billion in reported recovery scam losses.

How do I check if an investment adviser or broker is real?

Search FINRA BrokerCheck at brokercheck.finra.org and the SEC's Investment Adviser Public Disclosure site at adviserinfo.sec.gov, then contact the firm through details you find yourself. The joint investor alert also warns against investing on the advice of anyone who contacted you unsolicited online.

Where do I report a crypto investment scam?

Report to the FBI at ic3.gov, to the CFTC at CFTC.gov/complaint, and to the SEC, and tell the exchange or ATM operator you used. You can also report to the FTC at ReportFraud.ftc.gov.

Updates

Independently fact-checked against the cited primary sources

Sources and References

  1. FBI Internet Crime Complaint Center, 2025 Internet Crime Report(ic3.gov).gov
  2. SEC, CFTC, FINRA and NASAA, Relationship Investment Scams: Investor Alert (Sept. 10, 2024)(investor.gov).gov
  3. FTC, What To Know About Cryptocurrency and Scams(consumer.ftc.gov).gov
  4. FTC, Investment Scams(consumer.ftc.gov).gov
  5. CFTC Customer Advisory, Pause Before You Pay (August 2026)(cftc.gov).gov
  6. FinCEN Notice FIN-2025-NTC1 on convertible virtual currency kiosk scams (Aug. 4, 2025)(fincen.gov).gov
  7. FTC Data Spotlight, Bitcoin ATMs: A Payment Portal for Scammers (Sept. 3, 2024)(ftc.gov).gov
  8. FTC, What To Do if You Were Scammed(consumer.ftc.gov).gov
  9. FINRA BrokerCheck(brokercheck.finra.org)
  10. SEC, Investment Adviser Public Disclosure(adviserinfo.sec.gov).gov
  11. CFTC, Submit a Tip or Complaint(cftc.gov).gov
  12. U.S. Attorney's Office for the District of Columbia, Scam Center Strike Force(justice.gov).gov
  13. 28 C.F.R. § 9.8, Remission procedures for victims(law.cornell.edu)
  14. 28 C.F.R. § 9.5, Criteria governing administrative and judicial remission and mitigation(law.cornell.edu)
  15. U.S. Department of Justice, Criminal Division, Large Remission Matters(justice.gov).gov
  16. 18 U.S.C. § 1343, Fraud by wire, radio, or television(law.cornell.edu)
  17. 15 U.S.C. § 78j, Manipulative and deceptive devices(law.cornell.edu)
  18. 17 C.F.R. § 240.10b-5, Employment of manipulative and deceptive devices(law.cornell.edu)
  19. 7 U.S.C. § 9, Prohibition regarding manipulation and false information(law.cornell.edu)
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