A recently published investigative report, compiled by the Office and the Observer, reveals that organized criminal groups use the UK as a virtual base for their fraud activities due to the country’s lenient business laws.
‘Lax’ UK regulations
Under the lights of the Office of Investigative Journalism, the UK is home to around 168 companies involved in crypto scams. Many of these companies running “pig slaughter” schemes take advantage of loopholes in the Company House registration system. One of the loopholes is that it is very cheap (only £12/$14) to register a company in the UK.
Since businesses are required to provide a UK office address to register, dozens of startups share physical addresses, such as a vacant apartment, to which they have little or no ties. He “lax” laws in the UK Business registration plays an important role in convincing victims of their credibility, with many saying they would not have fallen for the scam if the companies had been located elsewhere, the report states.
How does pig slaughter work?
The pig-killing scheme refers to scammers essentially “fattening” their victims by slowly building trust before killing. Typically, the victim is contacted via social media such as Twitter or Instagram by a scammer who gradually gains her trust and eventually raises the subject of finances or investing in cryptocurrencies or forex.
The victim is then persuaded to invest a small sum at first, usually by depositing it into a wallet or exchange controlled by the scammer. The scammer further fattens the victim by building more trust, even incorporating romance, and persuades them to wire a heftier sum, only to have them disappear with all the funds, leaving the victim dead.
Pig slaughter gained prominence in 2019 as a scam targeting men in China, but the perpetrators have since expanded their net. In the UK, ActionFraud estimates that in 2022 alone, losses due to cryptocurrency scams increased by 72% to £329 million.
