Cryptocurrency scams are poised for a record-breaking year in 2025, with the assistance of AI and scam-as-a-service operations making it easier for scammers to deceive unsuspecting victims. Blockchain analytics firm Chainalysis has highlighted the role of generative AI in driving fraud, citing its ability to make scams more cost-effective, scalable, and difficult to detect.
In its recent report on Crypto Scam Revenue in 2024, Chainalysis raised concerns about the use of AI by fraudsters to enhance their schemes. Elad Fouks, Head of Fraud Products at Chainalysis, noted that AI-powered tools can generate fake identities and synthetic content, enabling scammers to impersonate real users and circumvent identity verification systems.
The report revealed that crypto scam revenue reached approximately $9.9 billion in 2024, with “pig butchering” scams leading the way. However, this figure is expected to surpass $12 billion as more fraudulent activities come to light. Chainalysis also shed light on the shadowy support network that facilitates scam operations at scale, with platforms like Huione Guarantee providing tools and infrastructure for scam networks to thrive.
One alarming trend highlighted in the report is the exponential growth of revenue from AI service vendors, indicating a significant increase in AI-powered scam tools. These tools have become more sophisticated and realistic, making it challenging for victims to distinguish between genuine and fraudulent content. Even verified crypto accounts are not immune to these scams, as fraudsters are finding ways to bypass traditional identity checks using AI-generated identities.
The impact of generative AI on fraud extends beyond the realm of cryptocurrency, with Deloitte’s Center for Financial Services warning that AI-powered scams and deepfakes could cost the US economy $40 billion by 2027. Recognizing the growing threat, the US Federal Bureau of Investigation (FBI) issued a warning in December 2023 about scammers using AI to target cryptocurrency investors.
Despite efforts to combat fraud, Chainalysis predicts that scam activity will continue to rise in 2025, fueled by the increasing accessibility of AI technologies to malicious actors. The company’s January report estimated that illicit crypto transactions could have amounted to $51 billion in 2024, underscoring the persistent challenges posed by fraudulent activities in the crypto space.
As the landscape of crypto scams evolves, it is crucial for individuals and organizations to remain vigilant and stay informed about the latest trends in fraudulent activities. By leveraging technology and implementing robust security measures, stakeholders can better protect themselves against the growing threat of AI-powered fraud in the cryptocurrency ecosystem.