Scammers are utilizing artificial intelligence to establish fake relationships, create convincing replica websites, and automate intricate fraud schemes that once required entire teams.
According to blockchain analytics firm Chainalysis, crypto scam revenue reached at least $9.9 billion in 2024. The total could rise to $12.4 billion once all data for the year becomes available.
AI is powering a new wave of scams
Chainalysis reports that so-called “pig butchering” scams were a major contributor to the surge in crypto fraud. These scams involve building trust with victims over time, then manipulating them into fraudulent investment schemes. Revenue from pig butchering scams rose nearly 40 percent in 2024 compared to the previous year, according to the firm’s February 2025 report.
The report highlights the growing use of generative AI in these schemes. According to Chainalysis, AI tools allow scammers to automate convincing conversations, build fake websites more efficiently, and target victims with greater sophistication. The firm noted that generative AI could exponentially increase the reach and speed of crypto scams.
Crypto fraud is becoming more sophisticated
Chainalysis found that crypto fraud activity has grown by an average of 24 percent annually since 2020. The fraud landscape is evolving rapidly, with scammers employing increasingly sophisticated tactics to extract funds from unsuspecting users. These include impersonating blockchain projects, offering fake high-yield investment opportunities, and creating seemingly legitimate crypto wallets that drain funds upon connection.
In one notable incident in January 2024, a scammer posed as a crypto drainer and impersonated the U.S. Securities and Exchange Commission after the agency’s official X account was compromised. Chainalysis included the event as an example of how even trusted institutions can be used to lend credibility to fraudulent schemes.
ATMs are a growing target for crypto scammers
According to Chainalysis, cryptocurrency ATMs are also being exploited. The firm describes them as hotspots for fraud, with scammers impersonating government officials or customer support agents to trick victims into depositing cash. Once funds are transferred through these machines, they can be difficult to recover.
This tactic has become increasingly common, especially among scams targeting older adults or those unfamiliar with cryptocurrency. The scammers often use pressure tactics, claiming the victim owes money or must verify an account urgently, then instruct them to use a crypto ATM to resolve the issue.
Market momentum is helping scammers thrive
The surge in fraudulent activity has coincided with renewed strength in the cryptocurrency market. According to Chainalysis, the sector experienced significant gains following Donald Trump’s victory in the November 2024 U.S. presidential election, driven in part by investor expectations of a more relaxed regulatory environment.
That wave of optimism has drawn more attention to digital assets, potentially making some investors more vulnerable to hype and less cautious with their decisions. In this environment, scammers are finding it easier to exploit enthusiasm, especially when returns seem too good to pass up.
Protecting yourself from AI-powered crypto fraud
The evolving threat landscape means that both experienced investors and newcomers need to stay alert. Chainalysis emphasized the growing complexity of scams and the critical need for consumer awareness.
- Verify sources. Never trust unsolicited messages from people claiming to represent regulators or tech support.
- Avoid pressure tactics. Scammers often create a false sense of urgency. Take time to think before acting.
- Research investments. Be skeptical of opportunities that promise unusually high returns with little risk.
- Check website authenticity. AI tools can now create highly convincing fake sites. Use official links and bookmark trusted pages.
- Be cautious with crypto ATMs. No legitimate authority will ever demand payment via a cryptocurrency ATM.
- Enable strong security. Use multi-factor authentication and avoid connecting unknown wallets or signing unknown smart contracts.
- Stick to safer options for emergency savings. link id=”290″ text=”SoFi Checking”] is offering 3.8% interest, plus a potential $300 signup bonus. (May change without notice.)
Chainalysis concludes that while law enforcement and blockchain analysts are improving their fraud detection capabilities, the rapid growth of AI-driven scams demands greater public vigilance. The tools are becoming more powerful, but so are the risks.
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