AI Is Making Crypto Scams Smarter—Insights from Chainalysis 2024

The 2024 Chainalysis report is out, and the numbers tell an alarming story—crypto scams aren’t just here to stay; they’re getting more advanced by the day.

Breaking Down the Key Trends

At first glance, scam-related revenues seem lower than in previous years. However, experts warn that this may be misleading, as the report only accounts for identified fraudulent addresses, leaving a vast amount of undetected activity.

Since 2020, crypto scam revenues have grown at an average annual rate of 24%, with some sectors surging even faster. The biggest gainers? High-yield investment schemes (HYIS) and pig butchering scams, the latter of which has seen a 40% jump in illicit earnings in just one year.

How AI Is Transforming Financial Fraud

Fraud is no longer just about deception—it’s about efficiency and scale, and artificial intelligence is making both easier. Alterya, the newest addition to the Chainalysis ecosystem, is introducing AI-driven fraud detection, offering unprecedented accuracy in identifying scam operations.

But the same AI advancements are also working in favor of scammers. Experts warn that synthetic identities and deepfake-powered verification have allowed fraudsters to blend into financial systems undetected. A staggering 85% of illicit transactions now go through fully verified accounts, a feat once considered nearly impossible.

HYIS Declines While Pig Butchering Scams Surge

In 2024, HYIS scams—which lure victims with too-good-to-be-true investment promises—remain the biggest source of financial losses, accounting for 50.2% of stolen funds. However, their dominance is fading, with revenues plummeting 36.6% compared to the previous year.

At the same time, pig butchering scams are on the rise, up nearly 40% year-over-year. Instead of chasing one-time big payouts, fraudsters are focusing on long-term manipulation, extracting money through a series of smaller, more frequent transactions. These scams are also evolving rapidly, incorporating elements of fake investment platforms, fraudulent job offers, and multi-layered deception tactics.

Huione Guarantee—The Hidden Engine Behind Global Fraud

Few platforms have done more to support large-scale cybercrime than Huione Guarantee. Functioning as an underground marketplace, it provides fraudsters with critical infrastructure, stolen data, and sophisticated laundering services.

Since 2021, Huione Guarantee has processed approximately $70 billion in illicit transactions. Its collaborative model allows criminals to pool resources, making fraud operations more sophisticated and scalable than ever before.

The Rising Risk of Crypto ATMs in Fraudulent Schemes

As crypto adoption grows, so does its darker side—and crypto ATMs are now a prime target for fraudsters. Originally meant to offer users seamless access to digital assets, these machines have become an increasingly common tool for laundering stolen funds.

FTC data paints a troubling picture: in just six months, fraud linked to crypto ATMs drained over $65 million from victims, with individual losses averaging $10,000.

Global Action Against Crypto Crime—Why Collaboration Matters

Crypto crime knows no borders, and neither should the fight against it. The 2024 Chainalysis report highlights how international cooperation is key in tackling the growing sophistication of financial fraud. One standout case is Operation Spincaster, where authorities—with the help of Chainalysis—successfully traced and disrupted over $187 million in illicit transactions tied to criminal syndicates.

More good news: WhiteBIT Freezes $150M in Stolen Crypto: Here’s How

Even as crypto scammers refine their tactics, one thing remains unchanged—blockchain transactions leave a trail. This inherent transparency allows law enforcement to track illicit activity and act swiftly to protect victims. Meanwhile, regulators worldwide are introducing tougher restrictions, from transaction caps to mandatory licensing for crypto ATMs, aiming to shield everyday users from financial harm.

The Chainalysis report paints a picture of an evolving battlefield, where AI, sophisticated fraud networks, and crypto ATMs present new challenges for regulators. But there’s hope—with stronger global collaboration and cutting-edge analytics, authorities can push back against fraud and make the crypto market safer for everyone.