A new report by Chainalysis has estimated that cryptocurrency scams amounted to $9.9 billion in 2024, with “pig butchering” and AI as leading causes.
Chainalysis added that its yearly estimates of overall scam activity have risen by an average of 24% between annual reporting periods since 2020, with pig butchering schemes seeing a notable uptick, as well as AI and crypto.
Pig butchering is a type of romance and investment scam where a scammer builds relationships with victims via social media or dating apps, intending to con them out of money through a sham investment opportunity, with the name coming from the idea of the flattery and relationship being used to “fatten up” the victim before the scam.
The new Chainalysis report now estimates that revenue from this type of scam grew nearly 40% year over year in 2024 and the number of deposits growing nearly 210% for the same period of time, indicating that the go to move was a wider spread victims in exchange for smaller payments.
Scammers are also getting creative with the generative AI (GenAI) technology as a way to run crypto scams, with these schemes seeing scammers using AI to impersonate other people or generate realistic content and coerces victims into making sham investments.
The Chainalysis data found that in 2024 some of the most successful vendors on the Huione platform, a network that serves fraudsters in South East Asia, were AI service providers, who saw revenue grow by 1,900% year over year.
The report also said dozens of software vendors sell this style of scam AI software while hosted on Huione.
“GenAI is amplifying scams, the leading threat to financial institutions, by enabling high-fidelity, low-cost, and highly scalable fraud that exploits human vulnerabilities,” said Elad Fouks, head of fraud products at Chainalysis
“It facilitates the creation of synthetic and fake identities…additionally, GenAI enables the generation of realistic fake content, including websites and listings, to power investment scams, purchase scams, and more, making these attacks more convincing and harder to detect.”
