US Sanctions Philippines tech firm over ‘pig butchering’ scams

The U.S. Treasury recently cracked down on a Philippines-based company, Funnull Technology Inc., accusing it of enabling online fraud on a massive scale, dubbed “pig butchering.” The sanctions come as the U.S. officials have found that the company operates out of the Philippines and has been supplying cybercriminals with digital infrastructure—specifically, by acquiring bulk internet protocol (IP) addresses and redistributing them to scammers.

In a statement released 29 May (Thursday), the Treasury named Funnull Technology and one of its alleged administrators, Liu Lizhi, as sanctioned entities. Lizhi, a Chinese national, is said to be 40 years old and linked to multiple addresses in Shanghai and Ganzhou. Virtual currency investment scams have become a billion-dollar industry, run by organised crime and fueled by human trafficking. At the heart of such scams is convincing people to put their money into fraudulent cryptocurrency schemes. Such scams rely on bogus websites to steal from victims. Earlier this year, researchers from Silent Push tied Funnull to a network of such sites.

What is ‘pig butchering’?

Originated in China, these scams invole scammers building trust with their victims over time—often posing as romantic interests or investment gurus—and then deceive them into investing in fake crypto assets or another fraudulent investment opportunity. The name refers to the metaphor of “fattening the pig” before slaughter. Scammers use a variety of methods to contact their victims through text messages, dating apps, and social media. The scammers may then ask to take the conversation “offline” to a messaging platform like Whatsapp or WeChat.

According to the statement, “Americans lose billions of dollars annually to these cyber scams, with revenues generated from these crimes rising to record levels in 2024.  Funnull has directly facilitated several of these schemes, resulting in over $200 million in U.S. victim-reported losses.”

“Today’s action underscores our focus on disrupting the criminal enterprises, like Funnull, that enable these cyber scams and deprive Americans of their hard-earned savings,” said Deputy Secretary of the Treasury Michael Faulkender.  “The United States is strongly committed to ensuring the continued growth of a legitimate, safe, and secure digital asset ecosystem, including the use of virtual currencies and similar technologies.”