The “Pig Butchering” scam has more recently turned its focus to scamming victims by using fake crypto investments and crypto mining. However, this scam had its origins in drawing unsuspecting investors to fake Forex brokers on MetaQuotes/Metatrader. In fact, these fake Forex scams were so successful that scammers are still using MetaTrader. MetaTrader is the preferred platform of scammers to use for Forex and Metal Trading (Gold, Silver, etc.) and which now also includes futures trading of cryptos. For example, BTC/USD is a real market with longing and shorting, but due to volatility most licensed brokers don’t participate in such trading because the ability to lose funds can occur quickly and without enough leverage an investor can be broke very fast. Scammers buy a White Label License from what is “supposed” to be a fully licensed broker that has a real license to use MetaTrader.
The general shift to fake crypto investments has occurred for a few reasons, first because of the popularity of crypto as a new investment vehicle, second scammers don’t have to register fake companies to obtain white label licenses from MetaQuotes, and third they don’t have to open up bank accounts for victims to wire funds to. MetaQuotes, the maker of the MetaTrader platform, collects monthly license, support, and maintenance fees from White Label holders (scammers). A white label license is created when a scammer buys a license to use MetaTrader from a company or individual who holds a real label license directly with MetaQuotes. With the scams shifting to crypto investments, MetaTrader started to lose out on their lucrative revenue stream from the white label licenses. To retain that market share, MetaTrader likely also shifted to crypto trading on their platform, which not only opens the door for the scammers, but also helps to sustain revenue from fraudulent brokers. MetaQuotes has zero rules or policies to prevent their license holders, real or white label, from using third party plug-in software, such as Virtual Dealer Plug-in (details below). At this point you may be asking the questions: What is Pig Butchering? White Label Licenses? Virtual Dealer Plug-in? and some of the other terms you just read. Let’s take a few minutes to thoroughly outline how all of this works.
Pig Butchering – Romance & Investment Scam
If you are not familiar with Pig Butchering, we recommend you take a few minutes and watch this video. All investment schemes involving romance are called Pig Butchering. Victims are contacted on Facebook Dating, Coffee Meets Bagel, Tinder, 2 Red Beans, Seeking Arrangement, Telegram, WhatsApp, WeChat, Line, Zalo, Facebook Messenger, Instagram, SnapChat, TikTok, LinkedIn and about any other type of social media. In the beginning, the contact is never about investments and usually they pretend to contact you on accident but say this is fate and let’s be friends. There will be many messages of good morning, how was your day, good evening, etc. and once a victim feels very comfortable and a sense of a relationship develops, the scammer then talks about their trading hobby, personal investment, or their “Uncle” who teaches them to invest. The following video does a great job of summarizing the pig butchering scam.
MetaQuotes & MetaTrader
MetaQuotes is the company that developed and licenses MetaTrader (MT4, MT5, etc.), which is used for Forex & Futures trading. They label themselves as a Software Company exclusively but take little to no due diligence to root out and stop scams occurring on their platform. If they get a request from law enforcement, they will cooperate, but victims have no outlet or means to openly report fraudulent brokers who scam them using MetaTrader. MetaTrader is the preferred platform of scammers to use for Forex and Metal Trading (Gold, Silver, etc.), which includes futures of cryptos. All scammers need is a license to access MetaTrader so they can use plug-in software called Virtual Dealer Plug-in, plus other apps which allows them to delay the real market price, change the real market price, change account balances (fake profits/losses/balances). They can even change the charts to the real market price once a trade is fully executed. Everything looks and feels real and they even will offer investors to open a demo account to practice on before they move to a real account. The demo account looks and feels real also, but everything is manipulated and fake. What a victim does not realize is that the minute they agree to open a real account and wire their funds to the fake broker’s account either from bank to bank or from wallet to wallet, these funds are stolen and gone forever. The balance a victim sees on MetaTrader was placed there using an app but there is never any real money you are trading with. All of the trades, even when someone pretends to guide you to buy/sell/long/short, are never based on real time market data or with done with real funds. It’s all just a show they put on to help them steal more of your money.
Real Label vs. White Label Licenses
As noted above, there are two types of labels for using MetaTrader. A real license bought directly from MetaQuotes and White Labels can be purchased from a real label holder. With a White Label License, this license is not bought directly from MetaQuotes and therefore there is little to no due diligence performed when applying for one. Anyone can easily pay $100 and register a company almost anywhere in the world. To register a company, you don’t even need a real address but instead you can rent a virtual address online. Once there is a registered company, called a shell company, that information can then be used to open a bank account. The shell company is listed as the beneficiary to make the banking information and fake broker look legitimate. This makes everything look more legitimate but don’t be fooled. Now the scammers have a registered company and a real bank account thus they can buy a White Label license and in doing so, they pay monthly fees directly to MetaQuotes and they also pay fees to the Real Label License Holder. More details below.
Withdraw Taxes and Fees
Once a victim decides to withdraw funds, they are they told they must pay a tax. Only a government can collect taxes, not a broker, however many victims don’t realize this. Some victims pay the tax which means the scammers just stole more money from you. The victim is then told there is suspicious activity on their account and money laundering has been detected, so a fee must be paid. This is just another trick to steal more money from victims. The scammers will ask a victim to pay as many fees and taxes until the victim is out of funds. The scammers then block you and walk away. Note that you should never
have to pay any investment company a Tax or Fee to withdraw your own funds.
Virtual Dealer Plug-in
Virtual Dealer Plug-in is third-party software designed for use with MetaTrader. As stated earlier, the sole purpose of virtual dealer plug-in software is to manipulate trades including market prices, delaying signals and even making fake account profits, losses and account balances. After trading has concluded, scammers can even go back into the charts and graphs in MetaTrader and change the prices that were traded. If a victim tries to go back and compare real market data to the MetaTrader charts, suddenly they match! This is because the charts, graphs, candlesticks, prices, etc. were changed inside MetaTrader after the fact using virtual dealer plug-in. Once a victim realizes this is a scam, the scammers tell a victim to look at their MetaTrader account statement and compare it to real market data which makes gathering evidence difficult. See the below links
How to Easily Manipulate MetaTrader
Fees Collected by MetaQuotes from White Label License Holders (Scammers)
MetaQuotes charges a scammer for a White Label License to use Meta Trader. As you can see below, the scammers pay monthly license and maintenance fees to use MetaTrader. This is monthly profits for MetaQuotes!