AI-Driven Crypto Fraud Surges 500% Amid Automated Attacks

According to a report published by TRM Labs, AI-based crypto fraud increased by an impressive 500% in the past year

ContentsAI powers fraudulent schemesDeepfake technology enhances scamsRecord losses and increasing Crypto crimeCombatting AI Crypto fraudThe fast development of artificial intelligence in cybercrime has enabled hackers to automate, scale, and customize crypto scams, which have led to massive financial losses.

Cryptocurrency cybercrimes have increased their efficiency and scale due to the use of generative AI tools

Nowadays, scammers use AI to perform phishing campaigns, identify as other people, and launder money more quickly than ever.

AI powers fraudulent schemes

Before the popularity of AI, mass crypto scams were massively dependent on human resources. Call centers and operators were the key to targeting the victim

Nevertheless, automation has taken over most of the manual processes due to the introduction of AI

Nowadays, generating convincing phishing emails, fake websites, and chatbots that look real is written by a generative AI.

Scam messages are also personalized with the help of AI. Fraudsters can find it easier to interact with their target because large language models (LLMs) are capable of generating customized content

AI translation tools also assist fraudsters in localizing these frauds in different regions and languages, which increases their efficiency.

Deepfake technology enhances scams

The Deepfake technology has also been central to the development of AI scams. Deepfake audio and video are used to deceive executives, other people, or even lovers in a very realistic way

The technology assists the criminals in developing confidence with the victims and deceiving them into giving out large amounts of money.

The capability of AI to handle hundreds of conversations at a time is a game-changer for fraudsters

It allows them to upscale scams, including romance and pig-butchering scams, which would otherwise demand a lot of human effort

Another advantage is the rate at which AI is capable of handling stolen data. Machine learning allows scammers to test stolen credentials, seed phrases, and private keys on a mass scale, which enables them to have control over the funds of victims in a short time.

Record losses and increasing Crypto crime

In recent months, the number of crypto fraud cases has reached alarming levels. In a high-profile instance, a crypto whale lost more than $280 million after being a victim of a social engineering attack

In the same way, a British employee of an engineering firm became a victim of deep fake fraud and lost his money to the tune of 26 million

In a different report, the federal agents of the US confiscated more than 61 million U.S. dollars of Tether USDT after they had tracked it down to money laundering in pig-butchering schemes.

In 2023, the value of illegal crypto operations reached an all-time high of 158 billion, having grown by 145%

According to TRM Labs, 30 billion of this amount was obtained through scams.

Combatting AI Crypto fraud

The growth of AI-related scams is not an accident, as the level of AI technology development is increasing at a high pace

Researchers such as Vectra AI have already recorded an enormous increase in AI-driven fraud, and it is expected to rise to 40 billion by 2024

With the development of AI tools, cybersecurity experts note that similar defensive strategies should be developed

Defenders need to use AI devices that will neutralize automated methods of the criminals to fight AI-related fraud.

The influence of AI on crypto fraud is indisputable. As scams have been automated and made more efficient, criminals have been contributing to larger revenues and making more transactions than ever

With cybercrimes growing and criminals steadily increasing their operations, security experts have to match the technological advancements to secure the crypto ecosystem.