Online scammers have stolen more than $1 million from so-called cryptocurrency liquidity pools recently,  according to cybersecurity system provider Sophos.

Sophos released findings on a pig butchering operation through the use of fake trading pools of cryptocurrency.

The report, "Latest Evolution of 'Pig Butchering' Scam Lures Victim in Fake Mining Scheme," details the story of one of the scammed victims in the pools, named Frank, and how he lost $22,000 in one week after "someone" pretending to be "Vivian" on the dating app MeetMe contacted him.

After Sophos X-Ops investigated Frank's story, the team uncovered a total of 14 domains associated with the scam operation, as well as dozens of nearly identical fraud sites that, together, netted one "ring" of pig butcherers more than $1 million in three months.

The scam takes advantage of the largely unregulated world of decentralized finance, or DeFI, cryptocurrency trading applications.

These applications create "liquidity pools" of various types of cryptocurrencies that users can then access for trades.

Those who participate in the pool receive a percentage of any fee paid when a trade is made, creating an enticing return on investment.

To join a pool, participants sign an online smart contract that gives another account, typically the operators of the pool, permission to access participants' wallets to facilitate trades.

Fake pools, which pig butcherers are increasingly utilizing to siphon funds from targets, operate in much the same way.

Liquidity pools cleaned up

However, unlike legitimate pools, at some point these scammers "pull the rug" and empty the entire liquidity pool for themselves.

"When we first discovered these fake liquidity pools, it was rather primitive and still developing. Now, we're seeing sha zhu pan scammers taking this particular brand of cryptocurrency fraud and seamlessly integrating it into their existing set of tactics, such as luring targets over dating apps," according to Sean Gallagher, principal threat researcher, Sophos.