3 min read 
Cryptocurrency scams collected $9.9billion in 2024, with Chainalysis projecting the total could further exceed $12bn as more illicit addresses are identified.
The surge comes as scammers use sophisticated artificial intelligence tools to create complex fraud operations and pig-butchering schemes, according to Chainalysis’s latest report.
The findings highlight how AI technology is changing crypto fraud, with 85% of scams now using fully verified accounts to bypass traditional security measures.
AI’s growing role in crypto fraud
According to Chainalysis head of fraud products, Elad Fouks, AI allows scammers to create high-quality fake identities and bypass identity verification controls at scale. The technology allows fraudsters to create convincing websites, listings, and marketing materials at minimal cost.
The Huione Guarantee platform has surfaced as a central hub for AI-powered scam tools. The platform hosts numerous software vendors providing generative AI technology specifically designed for fraud.
Analysis of on-chain data shows 2,345 transfers between different service providers on Huione in 2024. As per the analysis, infrastructure providers and social media management services showed the highest transaction activity.
This AI-powered approach has proved particularly effective in authorized push payment (APP) fraud, where victims are deceived into authorizing payments themselves. The technology helps scammers create believable personas and maintain conversations across multiple targets simultaneously.
The report found that 85% of current scams involve fully verified accounts that successfully bypass traditional security measures.
The impact is most visible in pig-butchering scams, which saw a 40% year-over-year increase in revenue. While the average deposit amount decreased by 55%, the number of deposits grew by 210%. This suggests that AI tools are helping scammers target a much larger pool of victims.
Scam methods and infrastructure improve
The crypto scam sector has become increasingly professional in 2024, with platforms like Huione Guarantee providing services for fraudulent operations.
The platform recently expanded its capabilities by launching a blockchain project called Xone and USD-pegged stablecoin, USDH. These tools are designed to resist regulatory oversight and asset seizures. While USDH is currently limited to Huione-affiliated websites, the team has announced plans to list the token on mainstream exchanges.
High-yield investment scams (HYIS) remain the largest category, accounting for 50.2% of all scam revenue in 2024. However, their dominance is declining, with a 36.6% year-over-year decrease. One notable HYIS operation, Smart Business Corp, has received $1.5bn in cryptocurrency by targeting Spanish-speaking countries with Bitcoin investment schemes.
Rising use of crypto ATMs for fraud
Crypto ATMs have become a major risk vector for fraud payments. The FBI reports thousands of cases where scammers, often posing as technical support or government officials, direct victims to deposit cash into these machines.
According to the Federal Trade Commission, losses through crypto ATMs increased tenfold since 2020, with victims losing a median of $10,000 each. In just the first half of 2024, total losses exceeded $65m.
Chainalysis estimates that current scam figures represent only a portion of total scam activity, as many illicit addresses remain unidentified. Based on historical patterns showing an average 24% growth in identified scam activity between annual reports, the final 2024 totals could substantially exceed current estimates.
The rise of address poisoning, crypto drainers, livestream fraud, and blackmail schemes are prime examples that scammers are diversifying their methods. The integration of AI tools has made these schemes more convincing and harder to distinguish from legitimate operations.
Traditional identity verification methods are becoming less effective as scammers use AI to create convincing fake personas and documentation. Chainalysis suggests that new approaches to fraud prevention will be necessary to fight these threats.
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