Scams involving Bitcoin (BTC) and other cryptocurrencies hit record levels in 2024, driven by the use of artificial intelligence (AI), according to a new report from blockchain firm Chainalysis.
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The report states that crypto wallets linked to scams and fraud received $9.90 billion last year, though it pegs the total value of all crypto fraud and thefts at $12.40 billion. Chainalysis said the amount generated from crypto scams worldwide has risen by an average of 24% per year since 2020.
According to the latest report, the most popular crypto scam continues to involve “pig butchering,” which is when a criminal builds relationships with victims via social media or dating apps, intending to con them out of money through a fake investment opportunity. The term “pig butchering” refers to the idea that scammers must first fatten up the victims with flattery before butchering them or stealing their money.
Rise of AI
In 2024, pig butchering revenue grew nearly 40% year-over-year, with the number of crypto wallet deposits from pig butchering scams growing 210%, according to Chainalysis. Beyond pig butchering, criminals are also turning to AI to help facilitate their scams. In 2024, AI-related crypto fraud grew 1,900% from a year earlier.
Chainalysis says criminals are employing AI to impersonate people or generate realistic content that fool victims into making phony investments. Chainalysis says that AI is being used to amplify and scale crypto fraud and crimes, making them more realistic to victims and increasing the financial losses. Specifically, AI is allowing criminals to create fake identities and impersonate real people.
The report concludes that tackling Bitcoin and other crypto scams will require sustained efforts from law enforcement, regulators, and individuals as the frauds become more sophisticated.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has risen 7.08% in the last 12 weeks.
