Malicious actors stole roughly $9.9 billion from the crypto ecosystem last year — the lowest amount since 2021, according to a recent  Chainalysis report.

The firm added that the figure is expected to rise to $12.4 billion as more fraudulent addresses are identified. 

Additionally, the report warned that AI-powered fraud techniques and the professionalization of the scam ecosystem are driving illicit activity to unprecedented levels.

AI supercharging crypto fraud

Generative AI has significantly lowered barriers for scammers, enabling them to create compelling synthetic identities, fake investment schemes, and deepfake-driven scams.

The report revealed that 85% of scams involve fully verified accounts that bypass traditional identity verification.

Elad Fouks, head of fraud products at Chainalysis, said:

“GenAI is amplifying scams by making fraud more scalable, cost-effective, and harder to detect. It allows criminals to impersonate real users, generate fake content, and orchestrate elaborate investment scams.”

The Huione Guarantee platform, a peer-to-peer black-market hub, has become a key enabler of AI-driven scams. It offers illicit services like AI-generated identities, deepfake voice technology, and synthetic verification tools. 

On-chain data shows a pattern where payments to Huione’s AI software vendors spike just days before major pig butchering scams see inflows. This indicates that fraudsters reinvest illicit gains into AI tools to fuel future schemes.

The rise of pig butchering and HYIS

Among various fraudulent schemes, high-yield investment scams (HYIS) and pig butchering scams accounted for most illicit crypto flows, receiving 50.2% and 33.2% of scam revenue, respectively.

While inflows to HYIS schemes dropped 36.6% year-over-year, pig butchering scams surged nearly 40%, reflecting a growing trend of romance and investment fraud targeting unsuspecting victims. These operations, which often originate in large scam compounds in Southeast Asia, have expanded globally.

Pig butchering is a scam method that lures victims into investing in a fake crypto scheme. The bad actors convince the unsuspecting investor to progressively allocate more money with fake promises and then steal the amount.

In December 2024, Nigerian authorities arrested 48 Chinese and 40 Filipino nationals for running a crypto investment scam targeting victims in Europe and the Americas. 

Meanwhile, Interpol disrupted global scam networks, including an operation in Namibia, where 88 trafficked youths were forced into crypto fraud in June 2024.

Scams are evolving

Furthermore, fraudsters have diversified their methods, shifting from long-term investment scams to quick-hit job frauds, where victims unknowingly send crypto deposits disguised as fees.

Eric Heintz, global analyst at International Justice Mission (IJM), said:

“These scams are particularly insidious because they prey on job seekers, especially those desperate for work.”

As scammers refine their techniques, Huione is expanding its financial infrastructure. In 2024, the platform launched a blockchain project called Xone and a stablecoin called USDH, which is designed to evade regulatory oversight and asset seizures.

Authorities are now racing to contain the growing fraud epidemic. While Interpol and financial watchdogs have intensified enforcement, the sophistication of scams — and their reliance on AI —suggests that traditional regulatory tools may be inadequate.

The post Crypto scammers net over $9B in 2024 as AI supercharges fraud appeared first on CryptoSlate.