$4.6 B Lost to Crypto Scams as AI Deepfakes Lead the Charge: Report
The post $4.6 B Lost to Crypto Scams as AI Deepfakes Lead the Charge: Report appeared on BitcoinEthereumNews.com.According to a brand-new research report co-authored by Bitget, SlowMist, and Elliptic, over $4.6 billion was lost to scams in 2024 alone, a 24% increase from the previous year. Deepfake AI impersonation, social engineering rip-offs, and modern-day Ponzi plans have actually emerged as the leading dangers to users.
The Most Common Scams
The report revealed that nearly 40% of high-value scams in 2024 included deepfake innovation. Scammers are using AI to produce persuading videos of public figures like X owner Elon Musk promoting phony financial investments on social networks platforms. In one high-profile case, Hong Kong police detained 31 members of a syndicate that used AI-generated videos of various crypto executives to steal $34 million. According to the study, bad stars are likewise using AI to bypass KYC procedures, forge customer service chats, and simulate platform control panels to fake authenticity. Even Zoom meetings are being weaponized, with fraudsters sending fake invites with links to malicious software.
Social engineering remains a major risk by exploiting individuals’s psychological vulnerabilities. This is being done through AI-powered arbitrage bot scams that promise simple profits through ChatGPT-generated code while directing users to connect with fake user interfaces that take their funds. Other typical methods include Trojan-laced job offers, phishing links in DMs and tweets, and address poisoning.
In addition, modern-day Ponzi schemes continue to evolve, now appearing as legitimate decentralized financing (DeFi), NFT, and GameFi projects. The report cited the 2023 JPEX incident in Hong Kong, where the platform promoted itself as a ‘global cryptocurrency exchange,’ using physical advertisements and celebrity endorsements to market its native JPC token, which allegedly had ‘stable and high returns.’ The platform did not have regulatory approval, leading to authorities tagging it as ‘highly suspicious.’ A subsequent crackdown revealed over $213 million in losses from more than 2,600 complaints by aggrieved users.
In 2015, blockchain investigator ZachXBT also exposed a fraud network linked to numerous rug pulls, including Leaper Finance and Zebra Finance. Such rackets utilize forged KYC documents and fake audit reports to lure users before stealing funds right after the value of their bogus tokens rises.
According to Bitget, modern digital scams differ from traditional Ponzi schemes by incorporating more sophisticated elements. These include advanced ‘social fission’ techniques that use messaging apps and livestreams to drive user-based recruitment, as well as gamified interfaces and fake identities.
Anti-Scam Initiative
Bitget, SlowMist, and Elliptic have also announced the launch of an Anti-Scam Hub to counter the growing threat posed to crypto by fraudsters. The initiative will be utilized to trace illegal funds, disrupt phishing networks, and identify deceptive behaviors across blockchains.
‘Criminals are constantly evolving their methods of attack, utilizing AI and discovering new ways to scale their activities,’ said Arda Akartuna, Lead Crypto Risk Scientist at Elliptic. ‘This means that reciprocally, we are also working to scale our technology and blockchain capabilities to track and identify the new methods criminals are using.’ A security fund worth more than $300 million is also being deployed to mitigate user risks.
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Fraudsters are using AI to create convincing videos of public figures like X owner Elon Musk promoting fake investments on social media platforms. According to the survey, bad actors are also using AI to bypass KYC procedures, create customer service chats, and simulate platform dashboards to fake legitimacy. Such rackets use forged KYC documents and fake audit reports to entice users before stealing funds right after the value of their fake tokens surges. These include advanced ‘social fission’ techniques that use messaging apps and livestreams to drive user-based recruitment, as well as fake identities and gamified interfaces.
