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29.01.23 Big Tech

‘Sham credibility’: how UK shell companies fuel ‘pig-butchering’ crypto scams

A woman meets a man online. They flirt. Then, after a few weeks, they begin imagining a future together. Fast forward a few months and one of them has been defrauded of their life savings.

It sounds like a classic romance scam, but it isn’t. This is “pig-butchering”: a brutal and elaborate form of organised crime, often involving criminal syndicates, modern-day slaves and victims around the world.

Since it rose to prominence in 2021, this method of fraud – which involves scammers grooming their targets before stealing huge sums in cryptocurrency – has fleeced victims of hundreds of millions of pounds and prompted warnings from Interpol and the FBI.

Last month, an inquest heard that one UK victim, a former police officer and father from Wiltshire, took his own life after losing around £100,000 – his entire pension lump sum – in a scam bearing the hallmarks of pig-butchering.

Now, an investigation by the Bureau and the Observer has found that organised crime groups are using the UK as a virtual base for their operations, exploiting lax regulation to carry out fraud on an industrial scale.

Analysis has identified 168 UK companies accused of running fraudulent cryptocurrency or foreign exchange trading schemes, around half of which are likely to be linked to pig-butchering scams.

Many of these firms are linked through domain registrations and while the vast majority of company directors are resident in China, details about the real owners are scant due to loopholes in the Companies House registration system.

Dozens of the companies share an address including an empty shop, a flat above a Chinese takeaway and a council flat in an east London tower block – but appear to have no genuine ties to them. The fact the properties have been linked to frauds is often known to the UK authorities.

Yet despite extensive evidence of fraudulent activity, and concerns about the potential for earnings to be laundered via the UK, little has been done to tackle the scam companies – or to prevent new ones from opening.

Margaret Hodge, MP and chair of the APPG on Anti-Corruption and Responsible Tax, said: “This horrible story is not an isolated incident. People traffickers, drug smugglers, fraudsters and scammers have been exploiting our lax and opaque corporate laws for years.

“Companies House is our first line of defence, but it’s not putting up much of a fight at all. It must check the information it is given and punish those who lie. And it needs to be properly funded to fulfil its role. At present, it costs £12 to incorporate a company. Raising the fee to £100 would provide enough resources to our law enforcement without increasing costs for the taxpayer.

“Anything short of that and the world’s criminal and corrupt will see that they can continue to manipulate and exploit us.”


The term “pig butchering” – or sha zhu pan in Chinese – refers to the process of scammers “fattening” their victims by slowly building their trust before moving in for the kill.

It became widely reported around 2019 as a scam that was targeting men in China, but the criminals have since widened their net. In 2021, the FBI received complaints relating to crypto romance scams in the US that resulted in losses of $429m (£316.9m). In the UK, there is no specific data on pig-butchering but nationwide, crypto fraud is rising rapidly. In the year to December 2022, reported losses in all crypto scams rose 72% to more than £329m, according to ActionFraud.

In a typical case, the prospective victim will be contacted by a scammer (or scammers), often posing as a young, attractive, wealthy Asian person. Sometimes they connect on social media, through a language-learning app, a dating site or via a “wrong number” text. They begin speaking more frequently, swapping selfies – sometimes explicit – and in some cases recording voice notes.

After messaging for a while, the topic of finance comes up. Often, the scammer mentions they have a friend who has made money through cryptocurrency or currency trading. Eventually the victim is persuaded to convert their cash into cryptocurrency and transfer it to a trading platform or virtual wallet secretly controlled by the scammer.

More time passes, the conversation carries on and trust continues to build. The “pig” has been fed and fattened; now it can be butchered. They are persuaded to make another transfer, this time involving a far greater amount of money.

One UK victim, Sam*, discovered he had lost £54,000 in a pig-butchering scam in December 2021. Around a month earlier, the mechanical engineer, 46, had begun speaking to “Jessica”, a New York-based Chinese woman in her thirties who had messaged him on Instagram. He had recently separated from his wife and his father had been diagnosed with cancer.

Sam is still struggling to come to terms with losing £54,000 in a pig-butchering scam in December 2021 Andy Hall/The Observer

Soon they were messaging day and night. And then, after a couple of weeks of chatting, Jessica mentioned crypto. Sam agreed to make a small transfer at first, to a platform her “friend” recommended, and then bigger ones. “I wasn’t trying to be greedy … all I was trying to do was make a little bit more money for a deposit,” he said.

When Jessica asked if he could invest more money, he became suspicious and a Google reverse image search confirmed she was not who she said she was: her photos were of a Japanese model. He confronted the scammer, who blocked him on WhatsApp. When he checked his cryptocurrency wallet the balance was zero. “I went into the bathroom and just stared at the mirror for about half an hour,” Sam said.

Over a year on, he is still struggling to come to terms with what happened. He is yet to get his money back and does not know if he ever will. He hasn’t told his family what happened and went a year without seeing his close friends. As he tells his story, he repeatedly describes himself as “stupid”.

“People will say, ‘What an idiot. How did you fall for this?’ But at the time I thought this person was genuine, and because I wasn’t in a great emotional space, I fell for it. I allowed the person to take advantage of me and manipulate me,” he says.

Victims of pig-butchering often blame themselves. But the fraud is the work of professionals.

Often, the conversations follow a script. Ohio resident Troy Gochenour, 50, who lost $25,600 (£18,900) and now volunteers for the Global Anti-Scam Organisation (GASO), remembers being told by “Penny”, whom he met on Facebook’s dating app, that she was afraid to speak on video call because of a traumatic incident where she had been driving while on a video call with a friend who got into a car accident and died. “Later on, I read a script that GASO had secured from one of the scammers and that exact story is in there,” he says.

Behind the scenes, the scam industry is even more sinister. Last year, an investigation by ProPublica revealed that thousands of people were being trafficked from across China and south-east Asia to work in “scam sweatshops” run by Chinese criminal syndicates, many of them in the Cambodian coastal city of Sihanoukville.

Lured by fake job ads, the workers are coerced into defrauding people around the world. If they resist, they can face “beatings, food deprivation or electric shocks. Some jump from balconies to escape”, the report said.

In a statement in August 2022, the UN’s special rapporteur on human rights in Cambodia, Vitit Muntarbhorn, described the conditions endured by trafficking victims as a “living hell”. He wrote: “If the scammer refuses to comply with the orders, the person might be tortured or locked in various compounds surrounded by barbed wire and iron fencing to prevent escape.”

In February 2022, Toby *, 32, a UK victim of pig-butchering, was defrauded out of £115,000 by a woman he met on the dating app Hinge. The day he realised what had happened they had been due to have their first date – dinner at a restaurant in Ilford, east London. Instead, he got a message telling him not to go and warning him not to transfer any more money.

“Everything is fake. Your funds … have found their way into the pockets of scammers,” the message said. “I don’t want to do [this]. I’m forced to work in a criminal group. I’m secretly sending this to you.”


To establish the scale of the UK’s crypto scam industry, the Bureau and the Observer reviewed lists of suspected shell companies and cross-referenced them with reports of fraudulent activity on the review site WikiFX and other online forums, Companies House data and reports of pig-butchering frauds gathered by GASO.

This produced a list of 168 companies which appeared to be running crypto or foreign exchange scams. In around half of these cases, the evidence led us to conclude they were likely pig-butchering schemes.

Common characteristics of these reports included victims being approached on social media, dating sites or WhatsApp; engaging in a friendly or romantic relationship prior to the scam; being informed of an investment opportunity using a trading platform such as MetaTrader; and transferring increasing amounts of cryptocurrency to scammers.

The Bureau and the Observer confirmed pig-butchering reports relating to 17 of these companies by interviewing nine of their victims, as well as reviewing reports relating to a further 14 individuals compiled by advocacy group GASO. Their total losses amount to £2.8m, which represents a small proportion of the total funds amassed by the fraudsters.

We were subsequently able to connect these to victims in countries including the UK, the US, Canada, Turkey, Germany and Poland.

The vast majority of companies – 140 – were registered to London addresses. Of those, a third (47) were registered to a single address in South Croydon, at a vacant shop on Brighton Road that is supposedly the headquarters of more than 10,000 firms.

Around 25 of the companies registered to this address are linked to pig-butchering scams, while another – Bitstream Circle Limited – was involved in a high-profile fraud targeting Kenyans. Investors in Bitstream Circle lost 1bn Kenyan shillings (£7.7m), according to a report in the Nation.

The second most commonly used address was the Chase Business Centre in Enfield, north London, where 20 suspected scam companies were registered. In Weston-Super-Mare, Somerset, there were another 17 businesses linked to suspected scams all registered to the same address above a Chinese takeaway.

Most of the firms identified (125) had at least one Chinese director and many shared a director or secretary. Multiple firms on our list cited their UK company number or used images of London on their websites.

Michael Davies, director of the company that runs Chase Business Centre, said: “We run a business centre and clients can use the address as a postbox and registered office and have no connection with these companies.”

Victims scammed via UK companies told us that had the firms not been registered in the UK, they never would have invested. One, a software engineer from California who lost $536,800 (£402,900) in a scam linked to Zion Global Ltd – a firm registered in Weston-super-Mare – said the company’s UK status gave it “sham credibility”.

“You subconsciously think you have a way to go after them if they take away all your money,” he said. “Had this company … been registered in China, I wouldn’t trust it. I just wouldn’t.”

One resident estimates they have received ‘three or four thousand’ letters meant for shell companies registered at their address Shanti Das/The Observer

Residents living in properties linked to the crimes say they too are suffering. At the address linked to the Chinese takeaway in Weston-super-Mare, the owner, Jin Lin, said companies were being registered there without his consent, and that he did not know who was behind them.

“What I wish is that Companies House would find out who is really running these companies. Because they can use any address and say the company is here, but nobody knows where the company is. I’ve returned many, many letters but they still send me the same letters. What can I do?” he said.

When we visited one address in east London linked to multiple scam companies, a young father living there with his wife and their children described how virtual squatting by criminals had left his family living a “nightmare”.

According to Companies House, the property is the headquarters for more than 200 companies. In reality, it is a two-bed flat in a grey tower block.

Over the last five years, the resident – a council tenant who asked not to be named – has been inundated with letters addressed to people he has never met, who supposedly run businesses from his flat. He estimates there have been “three or four thousand” and offers two plastic bags stuffed full with the most recent ones as proof. Sometimes, strangers show up and ask questions about companies supposedly registered to the address. “I’ve said to my [family], ‘When I’m not home, don’t open the door,’” he says.

He says he has repeatedly flagged the problem to Companies House and been told it is investigating. But still the letters come.


Loopholes in the UK’s company registration system have been known for years – long before pig-butchering emerged. It currently costs as little as £12 and takes a few minutes to register a company online, without the need to provide any proof of ID.

The government has pledged to tighten the rules, including the introduction of a requirement to verify information provided to Companies House. The second part of the Economic Crime Bill is yet to go before the Lords and the timeline for its future implementation is unclear.

Graham Barrow, a financial crime investigator and host of the Dark Money Files podcast, welcomed the reform of Companies House as a “step forward”, but said that the legislation could contain “significant loopholes”, such as the ambiguity around ID verification for individuals using company service providers to register companies on their behalf.

Paul Wilson, 38, from Stockton-on-Tees, is slowly rebuilding his life after being tricked into investing $50,000 (£35,200) into a bogus platform registered at the Chase Business Centre in Enfield.

At the time of the scam, he was vulnerable: he and his Ukrainian partner had just been forced to flee their home in Kyiv following the Russian invasion. At the same time, his flooring business had ground to a halt and the value of his cryptocurrency investments had crashed.

Wilson received an Instagram message from a woman calling herself Jing Zeng, asking if he knew anything about antiques. He didn’t, but they began chatting sporadically, mostly about her career as a trader. Sometimes she would tell him how attractive he was, which he found odd but flattering.

Zeng showed him how to make trades on MetaTrader, an app since delisted by Apple. Trading on MetaTrader is done by brokers who obtain a licence from the company, and Zeng said she used one called Brave Climbing FX. Wilson transferred $1,000 at first, and then larger amounts, until eventually he had sent $50,000.

When he realised, he had lost it all, he considered ending his life. “I just jumped in my car and I just drove…. and I was just at the point of committing suicide, to be honest,” he said. “My family and my girlfriend managed to find me and talked me back.”

The case of James Hutcheson, a British Transport Police officer of 28 years, follows a similar pattern. The 51-year-old was persuaded to make an investment in cryptocurrency by a woman who gained his trust online. He initially sent £40,000 and quickly earned £5,000 back. In all he is thought to have invested around £100,000 – his entire pension lump sum.

According to his friends and family, the fraud left him “penniless” and at risk of losing his home. He took up decorating jobs and was working as a delivery driver but became “deeply distressed” and “began to spiral”. On 25 May 2022, Hutcheson died near his home in Chippenham, Wiltshire. Shortly before his death, he tweeted to warn others about a “scam” website which has since disappeared, along with the people behind it.

Ian Singleton, area coroner for Wiltshire and Swindon, concluded that he had taken his own life after the scam left him in “extreme distress” for which he did not seek professional help. He had reported it to ActionFraud, which had referred it to Wiltshire Police, but he was unable to recover his funds.

In statements, his friends and family described him as a “sensitive soul” and a “social animal with a big smile” who was “always very careful” with his money. “To this day I cannot understand how it suddenly escalated so fast from a few thousand to such a big sum,” a former partner said.

Companies House reform may take a long time to implement and, in the meantime, victims are left struggling for justice. The ability of law enforcement agencies to crack down on scammers and recover funds remains limited, due in part to the relative anonymity of cryptocurrency, though the UK’s National Crime agency is working to establish a new crypto crime unit.

Those interviewed for this investigation had reported their cases to police forces in the UK or their home countries, the Financial Conduct Authority, or cryptocurrency exchanges which they had used to make transfers. None had any success recovering their funds.

“What’s been happening in the UK is unconscionable,” said Graham Barrow. “We have known for 20 years at least that UK companies are being used in these scams and that we are probably the world’s biggest provider of scam companies.

“It is an abject failure by the UK government to have done nothing about it.”

A Companies House spokesperson said: “We are aware of the misuse of the company register to support illicit activity and recognise the difficulties faced by those affected by this”.

“Where potential criminal activity is identified, we work closely with law enforcement agencies.”

A Department for Business, Energy and Industrial Strategy spokesperson said the government was working to introduce identity verification for those who register companies through the Economic Crime Bill, which would “give Companies House new powers to check, challenge and decline any suspicious information on the Register”.

An FCA spokesperson said: “Cryptoassets are unregulated and high-risk, which means people are unlikely to have any protection if things go wrong. If people choose to invest in cryptoassets they should be prepared to lose all their money.”

Header picture: Sam, not his real name, lost £54,000 in a pig-butchering scam. Credit: Andy Hall/The Observer

Reporters: Niamh McIntyre and Shanti Das
Technology Editor: Jasper Jackson
Global Editor: James Ball
Editor: Meirion Jones
Production: Alex Hess and Emily Goddard
Fact checker: Simon Lock

Our reporting on Big Tech is funded by Open Society Foundations. None of our funders have any influence over the Bureau’s editorial decisions or output.