Exclusive Report: Crypto Scams Hit Record Highs in 2024, Fueled by AI, Says Chainalysis
Blockchain analytics firm Chainalysis revealed that cryptocurrency scams reached unprecedented levels in 2024, driven by the rise of “pig butchering” schemes and the growing use of generative artificial intelligence (GenAI).
In a report published on Thursday, the firm estimated that revenue from pig butchering scams, where fraudsters build trust with victims and lure them into fraudulent investments, surged by nearly 40% in 2024 compared to the previous year.
Total revenue from crypto scams in 2024 is projected to be at least $9.9 billion, with the potential to climb to a record-breaking $12.4 billion as more data becomes available.
Chainalysis researchers noted that crypto fraud has become increasingly sophisticated, with scammers leveraging online marketplaces that support pig butchering operations and utilizing GenAI to expand their schemes more efficiently and at lower costs.
The firm warned that GenAI technology has the potential to “exponentially scale crypto scams,” making them more pervasive and harder to detect.
Since 2020, crypto fraud activity has grown by an average of 24% annually, according to Chainalysis, which tracks publicly available blockchain transaction data to identify scam revenue.
The cryptocurrency sector, led by Bitcoin, has seen significant growth in both value and popularity in recent years, fueled by investor interest in blockchain technology and the pursuit of high returns. The market has also been buoyed by expectations of a more favorable regulatory environment following the U.S. presidential election in November.
Other highly profitable scams identified by Chainalysis include crypto drainers, where fraudsters impersonate blockchain projects to gain control of victims’ wallets, and high-yield investment schemes that promise unrealistic returns.
In a notable incident in January 2024, a crypto drainer impersonated the U.S. Securities and Exchange Commission (SEC) after the regulator’s X account was hacked.
Cryptocurrency ATMs have also emerged as key hotspots for scams, with fraudsters often posing as government officials or customer support agents to trick victims into depositing cash into the machines.
As crypto scams continue to evolve, Chainalysis emphasizes the need for increased vigilance and stronger regulatory measures to combat the growing threat.
Comments are closed.