How an AI-powered romance scam drained a Bitcoin retirement fund

Key takeaways

• A recently divorced Bitcoin investor lost his entire retirement fund, an entire Bitcoin, to an AI-powered romance scam orchestrated by a sophisticated criminal using deepfakes.

• Pig butchery scams are relationship-based frauds that rely on emotional manipulation and AI-generated deepfakes to build trust before extracting maximum financial value from victims.

• The scammer used AI to create synthetic portraits and make fake video calls in real time, making the fabricated relationship virtually indistinguishable from the real thing.

• Once cryptocurrency is transferred via a blockchain, recovery is almost impossible. Unlike bank transfers, victims do not benefit from any chargebacks, reversals or consumer protections.

When a recently divorced Bitcoin (BTC) investor finally reached the milestone of owning a full Bitcoin, he thought his financial future was assured. However, within days, an elaborate scheme orchestrated by a sophisticated AI scammer caused him to lose his entire retirement savings and left him devastated.

His story, shared by Bitcoin security advisor Terence Michael, offers a crucial lesson in how emotional manipulation, combined with modern AI technologies, has weaponized traditional scams to target cryptocurrency holders.

Understanding the framework of pig butchery

Before examining the specifics of this case, it is essential to understand what security experts call “pig butchery” scams. Unlike traditional cryptocurrency hacks that directly target wallets, these schemes are relationship-based frauds that rely entirely on psychological manipulation. The term, borrowed from the agricultural practice of fattening an animal before slaughter, describes how scammers gradually build trust and an emotional connection with their victims before extracting maximum value.

The fundamental difference is crucial. Victims willingly send their funds, believing they are making good investments or supporting someone they love. This consent-based manipulation makes these schemes extremely difficult for fraud detection systems to identify, because the transactions themselves appear legitimate on the surface.

According to a report from Cyvers, a blockchain security platform, the average victim preparation period lasts between one and two weeks in about a third of cases, while about 10% of victims experience preparation periods spanning one to three months. This extended timetable highlights the sophistication of these operations. Fraudsters understand that patience and consistency build credibility much more effectively than rushing the process.

How the scam unfolded: The AI ​​advantage

In this case, the scammer used a sophisticated, multi-layered approach that leveraged AI. The victim was first contacted via an unsolicited message from someone claiming to be an attractive shopkeeper.

The scammer offered to help double the investor’s Bitcoin holdings, a promise designed to appeal to both greed and the desire for financial security, especially for someone dealing with a recent divorce.

What made this scheme exponentially more powerful than traditional romance scams was the integration of AI technology. Rather than relying on stolen photos or crude image editing, the scammer used AI to generate fully synthetic portraits that looked convincingly realistic. These AI-generated identities are almost indistinguishable from real people to the untrained eye.

During video calls, the scammer used even more sophisticated technology. The live deepfake video generation superimposed a fabricated face onto the scammer’s real body in real time. Advanced systems can now maintain lip-syncing accuracy in different lighting conditions, creating the illusion of a real human connection so convincing that even skeptical viewers have difficulty detecting the deception.

The emotional dimension cannot be overestimated. The scammer claimed romantic feelings, discussed his future plans, and constructed an elaborate narrative of a woman who seemed deeply concerned about the investor’s financial well-being. The victim was even convinced to buy a plane ticket to meet in person, thus deepening the psychological investment. This personal connection proved far more compelling than any technical security measure.

Vulnerability and life circumstances

The specific targeting of a recently divorced person was no coincidence. This was calculated predation. Divorce creates acute vulnerability, including emotional isolation, diminished self-esteem, and a psychological void that scammers are trained to exploit. Scammers actively recruit victims who fit specific profiles, such as elderly people, recently divorced people, widows, widowers, and people expressing loneliness online.

This case highlights a critical blind spot in modern fraud prevention. Traditional bank fraud detection systems are designed to flag unusual transactions, not to recognize psychological coercion. The victim’s Bitcoin transfers appeared completely normal to automated systems, consisting of regular amounts over time rather than a single large withdrawal. This gradual escalation is deliberately designed to circumvent algorithmic detection.

The scale of the problem

In 2024, pig butchery scams cost victims $5.5 billion across approximately 200,000 individual cases, or an average of $27,500 per victim, according to Chainalysis. The company has also classified these scams as a national security issue. Losses from romance scams exceeded $1.34 billion in 2024 and 2025, with the Federal Trade Commission reporting that 40% of online dating was targeted by romance scams.

AI has made these programs exponentially more scalable. Below are several ways to protect yourself from these scams:

• Verify identity through multiple channels: Request live video calls rather than accepting pre-recorded messages. Look for unnatural eye movements, inconsistent blinks, and distorted edges where the face meets the neck, which are common indicators of deepfake.

• Be skeptical that the relationship will progress quickly: Real relationships develop gradually. Declarations of love within a few days, especially when associated with investment opportunities, should trigger immediate suspicion.

• Consult trusted advisors before transferring funds: Contacting security professionals or financial advisors before transferring cryptocurrency can provide a rational perspective when judgment may be compromised.

• Be aware that legitimate merchants do not date customers: Professional investment advisors maintain clear ethical boundaries. Someone offering both romance and investment opportunities should be treated as a serious red flag.

• Understanding irreversibility: Bitcoin and other cryptocurrencies do not offer any consumer protections, such as chargebacks or reversals. Once funds are transferred, recovery is generally impossible.

Vigilance on vulnerability

The investor’s loss of a full Bitcoin represents not only a financial setback but also a deep emotional trauma that extends far beyond monetary terms. Beyond the devastating financial impact, he faced the psychological shock of discovering that the romantic relationship was entirely fabricated, the emotional intimacy faked, the future plans imaginary and his trust completely violated by a criminal operating across multiple time zones.

His story serves as a cautionary tale for cryptocurrency holders. Technical security is just one level of protection. Personal vigilance, skepticism of unsolicited contact, emotional awareness, and consultation with trusted advisors constitute an equally critical perimeter of defense.

As AI makes deception increasingly sophisticated, human judgment, informed and grounded in healthy skepticism, remains the most powerful protection against scams designed to exploit deep human needs for connection and security. The lesson is not to distrust online relationships entirely, but to recognize that the convergence of romantic interests and financial opportunities requires extraordinary caution before funds change hands.