Feb 13, 2025

Crypto Scams Hit Record $9.9 Billion in 2024, Fueled by AI and ‘Pig Butchering’ Schemes

Crypto Scams Hit Record $9.9 Billion in 2024, Fueled by AI and ‘Pig Butchering’ Schemes

Cryptocurrency scams reached an estimated $9.9 billion in 2024, according to a report by blockchain analytics firm Chainalysis.

The figure, which is expected to increase as additional illicit wallets are identified, reflects the growing sophistication of crypto-related fraud. A surge in AI-powered scams and the expansion of so-called “pig butchering” schemes contributed significantly to the rise in scam revenue, underscoring the evolving threats facing investors and regulators alike.

Despite appearing to decline initially, scam revenue for 2024 is likely to set an all-time high, with Chainalysis estimating that the final total could surpass $12 billion as further analysis is conducted. Since 2020, reported scam activity has increased by an average of 24% annually, and the emergence of AI-driven deception has only exacerbated the problem.

The Rise of Pig Butchering and High-Yield Investment Scams

Among the most profitable fraud categories in 2024 were high-yield investment scams (HYIS) and pig butchering schemes, which accounted for 50.2% and 33.2% of total scam revenue, respectively. HYIS scams saw a 36.6% decline year over year, but pig butchering scams—elaborate schemes where fraudsters build trust with victims before swindling them—experienced a 40% increase in revenue.

These scams, often originating from organized compounds in Southeast Asia, have also expanded geographically. In December 2024, Nigerian authorities arrested 48 Chinese and 40 Filipino nationals involved in a large-scale pig butchering operation targeting victims in Europe and the Americas. Earlier that year, an Interpol-led operation disrupted scam networks worldwide, including one in Namibia that forced 88 youths to participate in fraudulent schemes.

Criminals are also adapting their business models. While traditional pig butchering scams can take months or even years to execute, new variations focus on employment fraud and work-from-home scams. Cybersecurity firm Proofpoint reported that scammers frequently register multiple backup domains, ensuring fraudulent job postings remain active even if taken down. Victims often unknowingly participate in tasks, only to be required to pay a withdrawal fee or tax before accessing their purported earnings, leading to further financial losses.

AI’s Role in Professionalizing Crypto Fraud

Huione Scam Technology Revenu Growth. Source: ChainAnalysis

Artificial intelligence has increasingly become a tool for scammers, facilitating the creation of realistic fake identities, websites, and investment opportunities. According to Chainalysis, Huione Guarantee, a Chinese-language online marketplace, has played a critical role in professionalizing crypto fraud by providing a one-stop-shop for cybercriminals.

Huione’s platform enables the purchase of AI-generated deepfake services, stolen personal data, and tools for bypassing authentication measures. AI service vendors on the platform saw revenue growth of 1,900% in 2024, illustrating the scale of AI-driven fraud. “GenAI is amplifying scams by enabling high-fidelity, low-cost, and highly scalable fraud that exploits human vulnerabilities,” said Elad Fouks, head of fraud products at Chainalysis and co-founder of fraud-detection company Alterya.

Meanwhile, scammers have begun leveraging generative AI to carry out authorized push payment (APP) fraud, deceiving victims into voluntarily transferring funds under false pretenses. This method has made investment scams more convincing and harder to detect, increasing their effectiveness.

With fraud operations becoming increasingly organized, law enforcement agencies and regulators face mounting challenges in combating crypto crime. Chainalysis emphasizes the need for global cooperation, regulatory advancements, and AI-driven fraud detection tools to stay ahead of evolving threats in the digital asset space.

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