Pig Slaughter Crypto Scam Exploits UK Companies House: Report

Pig Slaughter Crypto Scam Exploits UK Companies House: Report

According to an investigation by the Bureau of Investigative Journalism and the Observer, more than 168 shell companies in the UK are suspected of running fraudulent crypto or currency trading schemes, around half of which may be linked to pig slaughter scams.

In fact, these organized criminal groups were found to be using the UK as a “virtual base” for their operations while exploiting lax regulations to conduct fraud on an industrial scale, the investigation says.

Pig slaughter fraud in the UK

After further analysis, the two media companies discovered that many of these companies are connected through domain registrations. Interestingly, a large majority of company directors are based in China, but details about the real owners are limited due to inadequacies in the Companies House registration system.

Despite rampant fraudulent activity and concerns about possible money laundering across the UK, the country has largely turned a blind eye. A similar sentiment was shared by Margaret Hodge, MP and chair of the APPG for Anti-Corruption and Responsible Taxation, who said human traffickers, drug smugglers, fraudsters and fraudsters have been exploiting the UK's lax and opaque corporate laws for years.

The British politician admitted that Companies House has failed to step up despite being the first line of defense and stressed the need to verify the information given to it and punish those who lie. She added,

"And it needs to be properly funded to fulfill its role. Currently it costs £12 to set up a business. Increasing the fee to £100 would provide sufficient resources to our law enforcement agencies without increasing costs to the taxpayer. Anything less than that and the criminals and corrupt of the world will see that they can continue to manipulate and exploit us."

Loopholes

Pig slaughter fraud originated in China. Also known by its Chinese name – Shāzhūpán – because attackers usually “fatten” or “groom” their victims before taking everything they have. While these scams are more prevalent in the cryptocurrency sector, they still affect other types of financial trading.

One of the main reasons why pig slaughter fraud has gripped the country is the long-known loopholes in the UK company registration system. Anyone can register a business online for just £12 without having to provide ID.

People interviewed for the joint investigation had reported their cases to police forces in the UK or their home countries, the Financial Conduct Authority or cryptocurrency exchanges they used to make transfers. However, none managed to recover funds.

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