Crypto scams likely set new record in 2024, thanks to AI

The rise of “pig butchering” scams and the increasing use of generative artificial intelligence likely lifted revenues from crypto scams to a record high in 2024, according to blockchain analytics firm Chainalysis.

Revenue from pig butchering scams, where perpetrators cultivate relationships with individuals and convince them to participate in fraudulent schemes, increased nearly 40% in 2024 from the previous year, the firm estimated in a report published on Thursday.

Revenue in 2024 from crypto scams was at least $9.9 billion, although the figure could rise to a record high of $12.4 billion once more data becomes available, it said.

“Crypto fraud and scams have continued to increase in sophistication,” Chainalysis researchers said.

The company pointed to marketplaces that support pig butchering operations and the use of GenAI as factors making it easier and cheaper for scammers to expand operations.
Indeed, GenAI technology could potentially “exponentially scale crypto scams”, Chainalysis said.

The company, which tracks publicly available transaction data on the blockchain to identify scam revenue, said crypto fraud activity grew 24% each year on average since 2020.

Cryptocurrencies, most notably bitcoin, have soared in price and popularity over the past few years as investors chased banner returns and interest in blockchain technology soared.

The sector has jumped significantly since U.S. President Donald Trump’s victory in the November election on hopes of an easier regulatory environment.

Other particularly lucrative scams included crypto drainers, where scammers pose as blockchain projects and take control of victims’ crypto wallets, and high-yield investment scams that promised outsized returns, according to Chainalysis.

In January 2024, a crypto drainer posed as the U.S. Securities and Exchange Commission after the regulator’s X account was compromised.

Cryptocurrency ATMs have also been key hotspots for scams, according to Chainalysis, with perpetrators often impersonating government officials or customer support agents to convince victims to deposit cash into the machines.