Crypto scams could have their biggest year yet in 2025, fuelled by the growth of artificial intelligence and professional scamming support services as the fraud industry gets more sophisticated.
Blockchain analytics firm Chainalysis said in its Feb. 13 Crypto Scam Revenue 2024 report that generative AI is making “scams more scalable and affordable for bad actors to conduct.”
“GenAI is amplifying scams, the leading threat to financial institutions, by enabling high-fidelity, low-cost, and highly scalable fraud that exploits human vulnerabilities,” said Elad Fouks, Chainalysis’ head of fraud products.
“It facilitates the creation of synthetic and fake identities, allowing fraudsters to impersonate real users and bypass identity verification controls,” he added.
Chainalysis found that crypto scam revenue reached around $9.9 billion in 2024, led by pig butchering scams. It expects the figure to likely increase to over $12 billion as it identifies more addresses associated with fraud and scams.
Scam revenue was lower in 2024, but Chainalysis expects this number to rise as it identifies more addresses. Source: Chainalysis
Using its new fraud detector that it acquired last month for a reported $150 million, Chainalysis said it found that 85% of scams involve fully verified accounts that bypass traditional identity-based solutions, which Fouks said is made worse with AI.
“GenAI enables the generation of realistic fake content, including websites and listings, to power investment scams, purchase scams, and more, making these attacks more convincing and harder to detect,” Fouks said.
Deloitte’s Center for Financial Services estimates that generative AI and deepfakes will cost the US economy $40 billion by 2027.
Chainalysis said crypto fraud and scams have continued to increase in sophistication, with operations like Huione Guarantee, a peer-to-peer (P2P) marketplace that offers legitimate services but also a host of illicit services that support scamming operations.
“When comparing crypto flows from 2021 through 2024 based on a compound annual growth rate, Huione scam infrastructure providers’ revenue has increased exponentially,” the analytics firm said.
In particular, AI service vendors’ revenue grew by 1,900% — “indicating an explosion in the use of AI technology to facilitate scams,” it added.
Huione scam technology vendors collectively received at least $375.9 million of crypto In 2024. Source: Chainalysis
The US Federal Bureau of Investigation sounded the alarm over scammers using generative AI to target cryptocurrency investments last December.
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Chainalysis says its annual estimates of scam activity have grown by an average of 24% between yearly reporting periods since 2020. The firm expects to find the total losses from scams to be even higher after considering AI-powered scams.
In a January report, the firm estimated that total Illicit crypto volumes may have reached as much as $51 billion in 2024, even though the share of illicit crypto use compared to the entire market has fallen to the lowest level in three years.
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