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The last time the US government sanctioned private actors to wage war on its behalf, they sailed wooden ships and carried cannons. Now they carry laptops. On August 12, 2026, the White House issued a presidential memorandum authorizing vetted private companies to conduct offensive cyber operations against transnational criminal organizations, with pig butchering scams squarely in the crosshairs.
Private firms, operating under federal supervision from the Department of Justice and the Department of Homeland Security, can now actively surveil and disrupt the criminal networks that have been bleeding American victims of billions of dollars annually.
How the program works
The memorandum builds on an executive order issued in March 2026 that established a National Coordination Center for tackling cyber-enabled transnational criminal organizations, or CE-TCOs. Participating firms must clear a high bar. Each company needs to post a bond of at least $1 million and undergo thorough vetting before being approved for operations. Once cleared, they can conduct cyber surveillance and “effects operations,” meaning they can actively disrupt criminal infrastructure rather than just watch it.
Operations can only proceed under federal supervision. Companies cannot target US persons without explicit authorization. The DOJ and DHS retain oversight throughout.
The policy represents a fundamental pivot from defense to offense. Rather than waiting for victims to report losses and then chasing perpetrators through traditional law enforcement channels, the government is now enabling preemptive disruption of criminal operations before they fully cash out.
Why pig butchering is the priority
Pig butchering scams have become one of the most devastating forms of financial fraud in the world. The name comes from the scammer’s methodology: they “fatten” victims with trust and apparent affection, often through dating apps or social media, before leading them to fraudulent investment platforms where their savings are slaughtered.
US victims report billions of dollars in losses from these schemes every year. Behind the friendly messages and fake trading dashboards sit sprawling criminal enterprises, many based in Southeast Asia — particularly in Myanmar, Cambodia, and Laos — that traffic their own workers into compounds where they’re forced to run scam operations under threat of violence.
Traditional enforcement has struggled to keep pace. The Treasury Department has sanctioned criminal infrastructure linked to these networks, but sanctions alone haven’t stemmed the tide.
The crypto dimension
Pig butchering scams are deeply intertwined with the crypto ecosystem. Victims are typically directed to deposit funds through cryptocurrency platforms, both legitimate exchanges and fraudulent ones designed to look real. The criminals then launder proceeds through complex chains of wallets, mixers, and cross-chain bridges to obscure the money trail.
Companies like Chainalysis, TRM Labs, and Elliptic already work closely with federal agencies. This memorandum potentially expands that relationship from passive analysis to active intervention.
Legal risks and the privateer problem
Legal experts have flagged significant risks in authorizing private entities to conduct offensive cyber operations, even under government supervision. The Computer Fraud and Abuse Act, which broadly criminalizes unauthorized access to computer systems, doesn’t carve out a clean exception for government-sanctioned private operations.
Offensive cyber operations targeting infrastructure in foreign countries, even criminal infrastructure, could create diplomatic friction with countries that host these criminal networks.
The $1 million bond requirement may prove inadequate if an operation goes sideways and causes significant damages. A single pig butchering network can process hundreds of millions in stolen funds, meaning potential liability from a botched disruption operation could dwarf that bond amount.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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