Slava Demchuk, Co-founder & CEO of AMLBot, a crypto intelligence platform with over 600K B2C users.gettyPig butchering is now one of the world's most common forms of fraud. I've encountered over 300 pig-butchering scam cases in blockchain forensics over the last six years that resulted in $15 billion in losses. There are a few lessons that are worth sharing from these victims' mistakes.Pig butchering is financial fraud in which scammers groom the victim by forming a connection over weeks or months, leveraging the trust built to persuade the victim to invest and send large sums of money in installments, usually in cryptocurrency.Pig butchering scammers are increasingly targeting business owners and employees through professional social media, like LinkedIn, or by finding profiles on other social apps that signal disposable income.I've encountered pig-butchering cases in which executives have wired millions to fake partners or imposters posing as the company’s financial staff. Using facial AI spoofing on video calls, scammers can also pose as investment partners, HR personnel or legal advisors.​​​​The New York Post reports that these scams have targeted victims on dating and professional networking sites since 2021. It's now crucial for businesses to understand this costly scam. Early preparation and education are crucial to enhance company security protocols.​​Breaking Down The Architecture Of A Pig Butchering ScamFirst, scammers run a full background check on their victims before they send their introductory message, not only to learn about their interests and potential "weak points," but also to make sure the target is worth their time, financially. The scammers usually first start in social media, using an attractive photo of a young man or woman that's engineered to make the victim fall into their trap.This fake persona then creates a connection of intimacy. The imposter gradually makes investment or finance conversations seem normal—it becomes a part of their daily conversations.By the time the imposter asks for financial aid or an investment from the victim, saying "no" feels harder. The victim is invested emotionally and their trust solidifies. Most of the scam victims don't even second-guess themselves and give in to the imposter's proposition. Pig butchering scams target emotional decision-making tendencies, and analytical thinking takes a backseat.The scammer often makes an emotional plea for the victim to prove they care by providing financial help or investing in their idea. The situations can vary from an investment opportunity to needing quick funds for emergencies like hospital bills or a car accident.What Businesses Can Do To Safeguard Against Pig Butchering ScamsFirst, train employees on the top signs of a pig butchering scam. These include messages that encourage them to invest quickly. Scammers often try to create a sense of urgency—if someone pressures an employee to act fast to transfer funds, they should be blocked immediately​. They should also notice if the contact makes excuses to avoid video calling or meeting in person. Additionally, claims of wealth, an overseas work profile or the offer of a once-in-a-lifetime investment are early signs of a scammer at play.A scammer may also tell them to join a crypto trading platform or other financial app. If they tell them to make small test deposits before a larger deposit, it's a big red flag.​Pig butchering imposters may spend months fostering relationships. Encourage your employees to have a healthy skepticism regarding financial advice or investment tips from new or even old contacts.Also, make sure your employees feel comfortable reporting unusual and suspicious messages, as early reporting can prevent damage. Business leaders should ensure that employees clearly understand who to contact if they suspect a scam. It’s important for employees to verify information through trusted channels, using official contact information. They should never email, call numbers or visit websites listed on suspicious messages.Second, establish a layered security plan for approving wire transfers, cryptocurrency transactions to partners or payment to new vendors. Ensure that a single employee doesn't have the authorization to sign for or validate large financial transactions.​Third, technical safeguards are another important factor. For example, implement multifactor authentication systems, email filtering and fraud monitoring tools to reduce the risk of account compromise or credential theft.​Fourth, it's also crucial to create an early response plan, and consider partnering with a blockchain analytics and tracing firm as part of your contingency plan. Technology like agentic case tracing now exists where transactions can be tracked across multiple blockchains that flag cases both on-ramp and off-ramp, identifying connections to known illicit clusters.Lastly, speed matters—businesses must block funds quickly once an incidence has been reported. Early action is key, as the sooner a blockchain analytics tracing company receives the transaction hash, the better the odds of flagging and blocking the scammer’s receiving wallet before the funds move again.​Conclusion​Leveraging the guilt, fear and shame of the victim is the scammers' strategy, leading their victims to the "slaughter" until their bank accounts run dry. Don't ignore the red flags common of pig butchering scams. Stay two steps ahead as business leaders—scammers only need one mistake.​Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?