Bitcoin Advisor Warns: Pig Butchering Scam Steals Client’s Life Savings

The incident, detailed by Terence Michael of The Bitcoin Adviser on social media platform X, involved a client who was not wealthy but had diligently saved to acquire 1 Bitcoin. Seeking improved security, the client had moved his funds off the Coinbase exchange into a multi-signature wallet structure set up in collaboration with The Bitcoin Adviser and Unchained. This configuration, often touted for protecting against theft and simplifying inheritance, was intended as a fortress for his primary financial asset and a source of long-term security for his young daughter.

However, the fortress had a fatal flaw: it could not protect against the client’s own authorized actions. The loss was not due to a technical failure, compromised private keys, or a custody breach. Instead, it was the result of prolonged psychological manipulation. The client was contacted by a person posing as a trader who promised high returns and gradually cultivated a romantic relationship, even convincing the recently divorced father they were in love and planning holidays together. Michael identified this as a classic ‘pig butchering’ scam, where fraudsters fatten victims with trust before slaughtering them financially.

Despite hours of intervention from Michael and others—including phone calls, repeated warnings, and articles about such schemes—the client remained convinced the offer was genuine. The multi-signature setup introduced procedural delays and required additional confirmations, and advisers attempted to slow the process by suggesting an intermediate transfer to a personal wallet. Ultimately, these measures could not prevent the determined victim from authorizing the final transfer to the scammer, highlighting the profound challenge of countering deep emotional manipulation with technical safeguards alone.

The case is not an isolated event but part of a global wave of crypto-related romance and investment scams. Last year, Nigerian authorities conducted one of the country’s largest crackdowns, arresting 792 people. The Economic and Financial Crimes Commission (EFCC) uncovered an organized network where foreign nationals collaborated with Nigerian recruits to carry out scams targeting victims worldwide. Investigators found that recruits were trained to impersonate foreign women online to lure victims into fake crypto investments, leading to the seizure of hundreds of SIM cards and computers.

More recently, Australian authorities uncovered massive misuse of cryptocurrency ATMs. A months-long investigation by AUSTRAC revealed over 150 scam cases where victims lost more than $3.1 million in a single year. In one poignant example, a woman in her 70s lost $281,000 after falling for a combined romance and investment scam, repeatedly depositing cash into crypto ATMs. AUSTRAC noted that many such victims were manipulated rather than criminally involved, prompting regulators to introduce stricter rules including cash limits, scam warnings, and enhanced customer identity checks to curb fraud.

Terence Michael’s client’s story crystallizes a sobering reality for the Bitcoin and broader crypto community. While multi-signature wallets and other custody solutions from firms like Unchained are essential tools for protecting against hacks, exchange failures, and accidental loss, they are powerless against an authorized transfer initiated by a psychologically compromised user. The security model assumes rational actors, but scams exploit human emotions—loneliness, greed, hope—to bypass these digital barriers.

Michael’s public warning serves as a crucial reminder: “Bitcoin can’t magically double, and it certainly can’t double by someone you haven’t met who is also falling in love with you.” The episode underscores that the security stack must now evolve beyond pure cryptography and key management. It calls for increased education on social engineering tactics, greater vigilance from advisors and custodians in monitoring for behavioral red flags, and a cultural shift where questioning ‘too-good-to-be-true’ opportunities becomes second nature. As fraudsters globalize their operations, protecting assets requires defending not just private keys, but the human psychology behind them.