Financial Grooming Scams: FAQ & Whistleblower Program
Financial grooming scams, also known as "pig butchering," involve online fraudsters who build trust through fake relationships before manipulating victims into investing in cryptocurrency or forex schemes, ultimately stealing their funds. These scams, a growing concern for agencies like the CFTC. Continue reading to learn more about this topic!
Updated
May 14, 2025
Introduction
Financial grooming or romance scams, also known as “sha zhu pan” or “Pig Butchering,” are deceptive social engineering frauds where online scammers, often associated with large criminal organizations, such as cartels or gangs, build trust with their victims by starting a friendship or romantic relationship.
As the relationship deepens, the conversations soon turn to money, where scammers introduce the victim to making money through cryptocurrency or forex trading. Soon victims are being asked to trade cryptocurrency or other forms of currency. They are then “locked out” of their funds when the scammer has taken all the victim’s money. The funds are then stolen, and the fraudsters disappear without a trace.
It’s not uncommon for a scammer to have multiple victims. In fact, the rise in financial grooming scams has caught the attention of government agencies, such as the Commodity Futures Trading Commission (CFTC), which reported that in 2023 alone victims lost more than $3.5 billion to such scams.
In 2025, the CFTC has made financial grooming and romance scams a top priority.
The CFTC has issued a Customer Advisory: “Six Warning Signs of Online Financial Romance Frauds,” providing tips to detect and blow the whistle on grooming financial gang operations. Continue reading to learn more about this topic and what you can do to report it if you’ve been targeted.
How Financial Grooming Scams Work
The goal of a financial grooming scammer is to start an online conversation with an unsuspecting victim and slowly escalate the relationship status until it becomes either romantic or otherwise intimate in nature. They want victims to believe that the relationship is genuine.
Most of these conversations start through the following channels:
- Text Message: The victim receives a text message from a wrong number
- Direct Message: The victim receives direct message through a social media app
- Dating Apps: The victim connects with a “match” on a dating app
- Email: The victim receives an unsolicited email with an enticing message
- Gaming Platforms: The victim plays online games with a scammer online
Once the scammer has built a rapport with the victim, they switch the conversation to money and begin the process of systematically engaging in a range of different tactics to draw the victim into the scam. Below are a few red flags to be aware of if you suspect you’re being targeted:
Romance Scam Red Flags
- Conversations are moved to private messaging apps, such as Signal, where there is heavier encryption and it is more difficult to detect.
- The scammer messages often, yet they cannot meet in person for several reasons, such as being shy or living in another country.
- The scammer claims to be rich and wealthy due to their intelligence and success in crypto or forex trading, among other digital marketing successes.
- Scammers are pushy and encourage victims to open trading accounts that accept cryptocurrency, which they then tell you to invest in.
- The scammer may ask the victim to send money to their wallet, where they claim that they can make the trades on the victim’s behalf.
A victim of a grooming scam may make a lot of money quickly at first, which makes the investment advice seem legitimate. However, this is a tactic to get the victim more invested in the scam. Eventually, the victim’s accounts may be “locked,” and the scammer may ask for additional fake fees to unlock it. Once there is nothing left to steal, the scammer will vanish. If you spot any of the above, be wary. It is also important to note that the initial rise in the investment may only be illusory. The rising balances that the scammer show the victim may not be accurate, and only act as a lure.
Always remember “If it sounds too good to be true, it probably is.”
Blowing the Whistle
Because financial grooming scams involve cryptocurrencies or forex investing, the CFTC plays a significant role in enforcement. They have developed expertise in identifying, investigating, and prosecuting such schemes.
Their mission is to protect investors from fraud and manipulation, such as in romance scams like pig butchering. This includes pursuing civil penalties, restitution for victims, and orders barring perpetrators from trading in the commodity markets.
CFTC Whistleblower Program
The CFTC has a robust whistleblower program designed to incentivize individuals to report violations of the Commodity Exchange Act (CEA) and CFTC regulations, including those related to financial grooming scams involving cryptocurrency, forex, and other commodities. Here’s an overview of the program in relation to these scams:
What is Offered?
- Monetary Awards: Whistleblowers who provide original information that leads to a successful CFTC enforcement action resulting in monetary sanctions exceeding $1 million are eligible to receive an award between 10% and 30% of the collected sanctions.
- Protection Against Retaliation: The Dodd-Frank Act, which established the whistleblower program, prohibits employers from retaliating against whistleblowers who report potential violations. This includes protection from being fired, demoted, suspended, harassed, or discriminated against.
- Confidentiality: The CFTC takes significant steps to protect the identity of whistleblowers. Information that could reasonably identify a whistleblower will not be disclosed without the whistleblower’s consent, except in limited circumstances such as legal proceedings.
Who Qualifies?
- Individuals: Any person with original information about a potential violation of the CEA or CFTC regulations can be a whistleblower. This includes employees, traders, market observers, investors, and even victims of the scam themselves.
- Original Information: To qualify for an award, the information provided must be original, meaning it is derived from the whistleblower’s independent knowledge or analysis and is not already known to the CFTC. The information must also be provided voluntarily, before the CFTC requests it.
- Impact on Enforcement: The information must lead to a successful CFTC enforcement action where monetary sanctions of at least $1 million are ordered.
What are the Awards?
- Percentage of Sanctions: As mentioned, the award ranges from 10% to 30% of the monetary sanctions collected by the CFTC in the enforcement action.
- No Cap on Awards: There is no specific cap on the monetary amount of an award. Some awards have been substantial,. For example, in October 2021, the CFTC awarded nearly $200 million to a single whistleblower.
- Factors Determining Award Amount: The CFTC considers various factors when determining the percentage of the award, including the significance of the information provided, the level of assistance the whistleblower provided in the investigation, the timing of the reporting, and the culpability of the whistleblower in the violation.
Is Protection Available?
- Anti-Retaliation: As stated earlier, the Dodd-Frank Act provides strong protection against retaliation by employers. Whistleblowers who believe they have been retaliated against can bring a private action in federal court.
- Confidentiality: The CFTC is committed to protecting whistleblowers’ identities. They will not disclose information that could identify a whistleblower without consent, except when legally required.
Can Victims Report Anonymously?
- Yes, with an Attorney: Individuals can become a CFTC whistleblower and report violations anonymously to the CFTC, but they must be represented by an attorney to file anonymously and still be eligible for an award. The attorney can file the Form TCR (Tip, Complaint, or Referral) on behalf of the anonymous whistleblower.
Example Case
Debiex (2025)
The CFTC has successfully sued a fake cryptocurrency platform called Debiex, exposing a scam that tricked people into investing by building trust through fake online relationships. Scammers posing as friendly or romantic contacts on social media convinced victims to open accounts on Debiex, which appeared to be a legitimate trading platform. In reality, no actual trading occurred, and the money deposited – over $2 million in total – was stolen.
The CFTC’s action resulted in a court order for Debiex to pay over $2.2 million back to victims and a penalty of over $221,000. The court also ordered the return of about $120,000 in cryptocurrency from a “money mule” who helped move the stolen funds. This case shows how scammers use fake profiles and promises of investment success to steal money through bogus crypto platforms. While the CFTC won the case, victims should be aware that recovering all their lost funds may not be possible.
Contact Our Firm
If you’ve been a victim of a financial grooming scam, romance fraud, or crypto fraud, contact our CFTC whistleblower law firm today for a free consultation. Our attorneys will determine whether the information you provide will trigger an investigation by the CFTC, and whether you qualify for awards and protection under their whistleblower award program.
Additionally, our attorneys provide comprehensive legal support beyond initial assessment, including strategizing information presentation to the CFTC, navigating complex regulations, and assisting with award applications and appeals. We act as an advocate, ensuring our clients’ rights are protected throughout the process.
Why Us?
Since 1988, KKC has offered the expertise, experience, and dedication necessary to effectively handle complex whistleblower cases and protect the interests of whistleblowers.
Our strong track record of helping clients win, commitment to client advocacy, and deep involvement in the whistleblower community make us a trusted choice for individuals seeking legal representation in these matters. In many cases, our team works on a contingency basis, meaning we only get paid if we win your case.
Fill out the intake form below to get in touch with our firm and explore your legal options.
