ChatGPT exposes multi-million dollar crypto pig-butchering scam, helps victims avoid greater losses

A San Jose woman, Margaret Loke, lost nearly $1 million in a cryptocurrency “pig-butchering” scam before uncovering the fraud with the help of ChatGPT. Last year, Loke met a man calling himself “Ed” on Facebook and developed a relationship with him on WhatsApp. Ed then guided her to transfer funds into a fake crypto account he controlled, with an initial amount of $15,000. Loke subsequently withdrew over $490,000 from her personal retirement account and took out a $300,000 second mortgage, totaling nearly $1 million in losses.

When her account was frozen and the scammer demanded another $1 million to unlock it, Loke turned to ChatGPT for help. The AI warned her that this was a typical scam and advised her to contact the police. An investigation later confirmed that Loke had been wiring funds to banks in Malaysia, where the money was withdrawn by a fraud ring.

The “pig-butchering” scam relies on building long-term emotional trust with victims before steering them into fraudulent investments and has become rampant on platforms like WhatsApp in recent years. Meta deleted more than 6.8 million related accounts in August this year. According to the FBI’s Internet Crime Complaint Center (IC3), online scams targeting elderly Americans cost $9.3 billion in 2024, with many originating from Europe and Southeast Asia.

Consumer agencies and regulators warn that requests for cryptocurrency investments in online romances are often signs of relationship scams. Once funds are transferred overseas, recovery is extremely difficult. Loke’s case shows that AI tools are beginning to play an important role in detecting and preventing cryptocurrency scams, providing timely warnings that reduce financial losses. (Decrypt)