Crypto fraudsters stole record amounts of money in 2024 – using increasingly sophisticated methods. The use of AI also plays a major role.
- Crypto fraud is increasing
- New fraud opportunities through AI
- Professionalization of the fraud scene
Crypto fraud reached new record highs in 2024 – mainly due to the explosive increase in so-called romance scams. According to blockchain analysis company Chainalysis, around 9.9 billion US dollars flowed to fraudulent crypto wallets last year.
A particularly worrying trend is so-called “pig butchering,” in which fraudsters build close emotional relationships with victims in order to subsequently rip them off with fake investment opportunities. Last year, revenues from such scams increased by almost 40 percent while the number of victims grew by a full 210 percent.
The perpetrators are increasingly operating globally: In addition to Southeast Asia, large fraud networks were recently uncovered in Nigeria. What is particularly alarming is that these scams are often based on human trafficking, as victims are forced to become part of the criminal schemes under threat of violence.
Artificial intelligence as an amplifier for fraud
The increasing spread of generative AI is also contributing significantly to the professionalization of the fraud industry. Chainalysis reports that in 2024, providers of AI-supported scam services on the notorious Huione Guarantee platform were able to increase their sales by 1,900 percent. “In short, Huione Guarantee has driven and enabled a huge, growing and interconnected fraud ecosystem,” Chainalysis said in this context.
Generative AI can be used to create deceptively real fake websites, fake social media profiles and manipulated content that lure victims into false investments. Particularly perfidious: fraudsters even offer “face-changing” services that can be used to change identities in video calls – a tool that has already been used for deepfake fraud cases worth millions.
The professionalization of the fraud scene poses immense challenges for regulators and law enforcement agencies. Comprehensive international measures are likely to be required to contain the exponential spread of crypto fraud.
Image by Miloslav Hamřík from Pixabay
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