Philippines: New Pig-Butchering Hub

Philippine police have rescued over a thousand victims exploited for performing crypto scams

People held in captivity
Criminal groups lure foreigners with job offers to make them participate in crypto scams

Today, Grace Poe, chairperson of the Philippine Senate Committee on Public Services, filed Senate Resolution 595 to investigate human trafficking and crypto scams operated by Colorful and Leap Group Company in the Clark Sun Valley Hub in Mabalacat City. Philippine authorities raided the company's facilities on May 4 and rescued 1,162 people held in captivity to run pig-butchering crypto fraud organized by at least twelve ringleaders from China, Indonesia, and Malaysia.

Read also: Crypto scammers used $45M from investors to buy luxury goods

As reported by the local news platform Philstar, Poe is extremely concerned about the current human trafficking situation in The Philippines.

"There is an urgent need to determine the supposed existence and cease the operations of these 'scam hubs' in the country for the protection of our citizens and foreign nationals that are being victimized by this kind of human trafficking scheme," Poe stated, adding, "Our inquiry sends the message to traffickers that this crime won't be tolerated and will be dealt with the full force of the law."

Poe believes that immigration authorities must provide detailed information about the conditions of the rescued foreigners' presence in the country. According to the Philippine National Police, most of these people were from Vietnam (423 employees), China (173), and Indonesia (173). Others were from Nepal, Malaysia, Myanmar, Thailand, Taiwan, and Hong Kong, and 172 victims were Filipinos.

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Ana Theresia Hontiveros, chairman of the Committee on Women, Children, Family Relations, and Gender Equality, had already raised the issue of cryptocurrency scam "hubs" in The Philippines during the Senate inquiry on human trafficking. Hontiveros warned that the country was used as "a petri dish for human trafficking," calling the issue "a serious national security concern" that needs urgent resolution.

As per her report, the country had an entire infrastructure comprised of large condominium buildings that provided housing and work facilities for imprisoned individuals who were "forced to perform scams on helpless victims."

Typically, victims were lured by enticing job offers that required them to move to The Philippines. Unfortunately, the promising careers had nothing to do with the initial offers. The real work was to manipulate other victims into investing in fake crypto projects.

One of the victims reported mentioned during the Senate inquiry, whose name was changed to Ridwan for anonymity, testified that an "unidentified escort" helped the prospective employees get past immigration officials and Bureau of Quarantine agents and get to the Bayport West NAIA Garden Residences in Pasay City.

Ridwan described working at the facility, "We were instructed to steal the identities of other people to scam targets. Our targets are our fellow Indonesians. We find them on Tinder, Facebook, and Instagram. After our targets fall in love with us, we make them invest in cryptocurrency."

If for some reason employees did not get victims, they were punished in various ways, including electrocution.

Despite the appalling situation, Ridwan was fortunate to get to the place where people were allowed to leave in exchange for a payment of 100,000 pesos which was worth more than $1,800 at press time. This was not the case for the recently rescued victims.

According to Michelle Sabino, spokesperson of the Philippine National Police's Anti-Cybercrime Group, the trafficking victims had their passports confiscated and were treated as "prisoners without a cell."

"They're not allowed to leave outside the bounds of the gate. After 18 hours of work, they're brought to their dormitory," Sabino said, adding that the victims were not even allowed to talk with each other.

Despite earlier warnings from Hontiveros and senator Rafael Tulfo, chairman of the Migrant Workers Committee, who also stressed the importance of urgent actions to address the problem of human trafficking, Sabino reported that the police operation to rescue the imprisoned workers in Mabalacat happened due to the Indonesian ambassador's request for help in finding missing nationals.

Pig butchering on the rise

Similar to the workplace that Ridwan left, Mabalacat employees were exploited to run crypto scams known as pig butchering. According to leading Web3 analytics firm Chainalysis, pig butchering has been a growing problem over the past year, and this trend is not likely to change anytime soon.

As Sabino explained, the scams carried out by recently rescued workers required establishing fake romantic relationships that gave crypto scam victims "a promise of a good future together."

Read also: Crypto fraud revenue down 46% but romance scams are on the rise: Chainalysis 2022 report

"Let's buy a house, buy a car, let's invest money, or let's do business together," Sabino named the activities requiring finances included in the scam strategy. That is when victims were tricked into making their investments.

Chainalysis reported that the average deposit made by victims in 2022 was the highest for romance scams compared to other types of scams. At nearly $15,600, this was almost three times the amount of the impersonation scam type with the second-highest average victim deposit.

Pig butchering uses similar strategies, including fake romantic relationships, but is organized on a large scale by complex criminal syndicates, sometimes involving multiple nations.

"A humanitarian crisis is taking shape. A mass of desperate humanity. Human beings of the world are being hurt, abused, and used in order to perpetrate fraud," Hontiveros said, calling on the government to take action.