Key Insights:
- Revenue from crypto scams rose in 2024, driven by methods like ‘pig butchering’ and AI which have become increasingly lucrative.
- Total earnings from crypto scams surpassed $9.9 billion, even amid efforts to regulate fraudulent activities.
- Scammers have adapted their strategies by employing AI, utilizing social engineering, and forming international networks to attract victims.
Crypto fraudsters may have amassed a record income of around $12.4 billion last year, predominantly due to the rise of ‘pig butchering’ schemes, according to blockchain analytics firm Chainalysis.
These fraudulent activities involve building trust with victims before persuading them to invest in fake crypto opportunities, a practice likened to fattening pigs for slaughter. Revenue from such schemes saw a 40% increase, reaching at least $9.9 billion.
Although law enforcement agencies globally have intensified their focus on these operations, scammers continue to refine their tactics, as disclosed by Chainalysis. The criminals leverage artificial intelligence and expand their networks across various countries, making their operations more ‘professionalized’. Since 2020, average scam activity has increased by 24% annually.
Chainalysis pointed out that platforms like Huione Guarantee serve as a comprehensive resource for scammers, offering services that include money laundering and social media management. In 2024 alone, Huione Guarantee reportedly received over $375.9 million in cryptocurrency.
Fraudsters often direct victims to bogus investment websites, convincing them to transfer funds into wallets controlled by the scammers. Once the money is sent, victims find it impossible to recover their funds, leading to the scammers vanishing.
Despite some progress in tracking and dismantling fraudulent operations, the vast number of scams presents significant challenges. With the ongoing rise in AI-driven deception, Chainalysis warns that more aggressive measures may be required to combat crypto-related fraud.
