Crypto scams likely set new record in 2024 helped by AI, Chainalysis says

In 2024, cryptocurrency scams reached unprecedented levels, with estimated revenues between $9.9 billion and potentially rising to $12.4 billion as more data becomes available. This surge is largely attributed to the increasing sophistication of fraudsters, notably through the use of generative artificial intelligence (GenAI) and the proliferation of “pig butchering” scams.

“Pig butchering” scams involve perpetrators cultivating relationships with victims, often via social media or dating platforms, to lure them into fraudulent investment schemes. In 2024, revenue from these scams increased nearly 40% compared to the previous year. The number of deposits to such scams grew by approximately 210%, indicating a broader victim base, though the average deposit amount decreased by 55%, suggesting scammers are targeting more individuals for smaller amounts.

The integration of GenAI has significantly lowered barriers for scammers, enabling the creation of convincing synthetic identities, deepfake content, and automated interactions that enhance the plausibility of fraudulent schemes. This technological advancement allows for the rapid scaling of scams, making them more cost-effective and harder to detect.

Additionally, the scam ecosystem has become more professionalized, with platforms like Huione Guarantee offering a range of illicit services to support fraudulent operations. These services include AI-generated identities, deepfake voice technology, and synthetic verification tools, facilitating the expansion and efficiency of scam networks.

Other prevalent scams in 2024 included high-yield investment schemes and crypto drainers, where scammers pose as legitimate blockchain projects to gain control of victims’ wallets. The increasing use of cryptocurrency ATMs for scams has also been noted, with fraudsters impersonating officials or customer support agents to convince victims to deposit funds into these machines.

Overall, the cryptocurrency fraud landscape in 2024 was marked by enhanced sophistication, technological integration, and a broader reach, underscoring the need for increased vigilance and robust security measures among users and platforms alike.