Decoding the Scheme of Pig Slaughtering: Analyzing the Cryptocurrency Fraud That Preyed on a Bank in Kansas – Important Information to Be Aware Of.

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Shan Hanes, the former CEO of Heartland Tri-State Bank, admitted to using $47 million of the bank’s funds for a fraudulent cryptocurrency scheme. Hanes could potentially receive a maximum sentence of 30 years in jail, a fine of $1 million, and be required to repay $60.5 million. The fraudulent operation, nicknamed “pig butchering,” entices individuals with false promises of significant profits from investing in cryptocurrency.

What does pig butchering involve?

In a fraudulent scheme involving pig butchering, individuals are lured into investing in a particular digital currency with the guarantee of high profits. These fraudsters gradually request additional funds through restricted applications or accounts. This practice is known as “fattening the victim” before ultimately taking their money.

The FBI cautions that this fraudulent scheme first emerged in China in 2019 and has since expanded to Southeast Asia.

Details of Shan Hanes’ case

An unknown fraudulent individual reached out to Hanes via WhatsApp and completed 11 wire transfers from the bank to his Kraken cryptocurrency account. Hanes provided false information to bank authorities regarding the transfers, leading to a loss of $9-13 million for those who have invested in the company. In May, Hanes acknowledged his wrongdoing and agreed to a plea deal.

During Year2020

Effects on Heartland Tri-State Bank in 2020

In July 2023, the bank was deemed bankrupt and its assets were taken over by the FDIC. Heartland Tri-State was acquired by Dream First Bank, allowing customers to still have access to their money. This specific failure was not viewed as a reflection of larger banking problems.