The realm of cryptocurrency fraud has undergone a concerning evolution of late, with the world’s digital con artists engaging in ever-more sophisticated forms of deception. If one is to believe a recent report from the investigative firm Chainalysis, many of today’s crypto scams are built around systems that use artificial intelligence (AI) in some way—shady chatbots that impersonate real people, for instance, or AI-generated images that make scam websites look all the more convincing. Other recent reports have suggested that some digital swindlers may be using AI to analyze social media and other online spaces for potential marks, or (yet another possibility) to generate text and speech that sound more natural when doing phone or Zoom pitches. The Emergence of New Scams: A Closer Look at the Numbers The Chainalysis report underscores the amazing growth in money earned from many different kinds of scams, with some experiencing truly stunning growth rates as high as 15,000%. These scam types are not only exceptionally profitable but are also becoming more frequent in the online space. All of this is happening at a time when consumer trust in the online world has been shaken by data breaches and other incidents of digital life being hacked, with the online fraud landscape now looking more threatening than ever. Pig Butchering (up 40%) One of the most infamous types of scams that continue to dominate the fraud scene is pig butchering. This con, which generally requires long-term engagement with victims, has become geographically more dispersed in recent years. It usually starts as a seemingly harmless online relationship that gradually morphs into a financial scheme. Most often, victims are led to believe that they’re safe to invest significant amounts of money—upwards of tens of thousands of dollars—only to realize they’ve been duped. But in 2024, the model has evolved. Instead of relying solely on the time-honored “long con” method, fraudsters have adapted the model to quicker-turnaround scams that often involve fake work-from-home job offers or employment scams. These new variants yield smaller deposits, but the sheer volume of victims means that fraudsters still rake in huge amounts of revenue. Crypto Drainers (up 170%) Draining cryptocurrencies through scams has gotten way more popular, and in 2024, that number increased by 170%. Why? Because we have more people in the crypto system now, and they are experiencing the so-called “user error” that a lot of us staunch critics of the crypto world warned against for years. They are familiar with it now, but we warned that they might fall for it—that is, get scammed by a fake platform, or a (dubiously) essential app that somehow gained enough trust to get downloaded. Even in a period of purgatory for cryptocurrencies, with many choosing to only hold Bitcoin, we are at more risk of falling for hook, line, and sinker scams than ever before. Address Poisoning (up 15,000%) Scams that involve misleading people into thinking they are dealing with real, untouched cryptocurrency wallet addresses have increased by an astonishing 15,000%. This type of attack works by changing the wallet address that a user means to send funds to, redirecting the funds right into the scammer’s hands. It’s particularly dangerous because the recipients of the scam can go completely unaware, and they appear to be sending and receiving completely fine transactions if one doesn’t go and dig deep into what the transactions are and who they’re actually going to. Livestream Scams (up 60%+) A scam that has experienced considerable growth in 2024 is livestream scams, which have increased by more than 60%. These scams usually occur on social media platforms, where con artists pretend to be celebrities, influencers, or financial gurus. They might tell viewers that they’re about to miss out on a lucrative investment opportunity or that their lives can be changed if they just send in some money. In the moment, when the viewer is seeing the fake personality in real time, it’s a convincing act. (Sag, 2024). Our Scams Report is out just in time for Valentines Day – and unsurprisingly we’re tracking Billions in proceeds for 2024 in what is likely to be a record year. While Investment and Pig Butchering scams continue to dominate, there is a slew of emerging scams to be wary of pic.twitter.com/yOUPIbEPad — J. Burns Koven (@JBurnsKoven) February 13, 2025 Blackmail and Sextortion (up 175%) The report also reveals a worrying 175% increase in blackmail and sextortion schemes. These schemes involve criminals trying to extort money by threatening to release sensitive personal content. The perpetrators are likely to have access to AI-generated drone footage that helps them get the goods on their victims—who, these days, are almost all online. We’re told that social media, dating apps, and the “online life” make people vulnerable to these attacks. The Role of AI in Shaping the Future of Scams The report makes clear that one of the principal forces propelling these scams upward is the increasing role of AI in the criminal world. The technology of AI is being used in numerous ways, such as making phishing emails seem more believable, or producing fake voices or images for scams. These days, if you’re a fraudster, you can do much of your work with the help of a computer, and the work you do with a computer can be much more automated, much more efficient, and—if you can believe it—much easier to scale up when you target victims. Services powered by AI that have been adapted for use in the scam economy are seeing a dramatic increase in demand. In fact, the revenue of scam tech vendors providing AI services, infrastructure, and data management has skyrocketed. Between 2021 and 2024, the revenues of these AI scam service vendors grew by an astounding 1,900%. This trend shows that the bad guys are no longer relying on dumb tactics. Instead, they’re using AI to create harder-to-detect, more sophisticated scams. A major enabler of these scams is Huione Guarantee, a P2P marketplace that allows fraudsters to buy and sell tools that help run these scams. Huione has become a cornerstone of the scam economy, allowing scam vendors to set up shop and contributing to the rapid growth of the scam economy. Conclusion: A Call for Vigilance and Awareness As we progress deeper into the digital era, we can only expect scams to increase in both sophistication and number. Fraudsters are following the money to our increasingly virtual lives and are turning modern technology — not to mention modern psychology — against us. They use every means available to them and some that aren’t really available but are promised in the ads we see, to get us to part with our money, our identities, and our hope of a secure future. Fighting their onslaught online is going to take clear heads, sharp eyes, and some very good tools. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
