Romance Scams, AI Fuel Record Crypto Fraud Revenues In 2024

Illicit revenues from romance scams and generative AI tools are likely to have lifted cryptocurrency-based fraud revenues to record levels last year, Chainalysis said.

The company, which monitors illicit flows into cryptocurrency wallets via publicly accessible blockchain data, said scam crypto revenues reached at least $9.9 billion (£7.9bn) last year and are likely to rise to around $12.4bn as it identifies more crime-linked wallets.

This would be in line with an annual rise of 24 percent in scam crypto revenues since 2020, Chainalysis said.

Romance scams

A leading driver of scam revenue growth last year were romance scams, commonly known as “pig butchering” scams.

Such scams involve developing a relationship with a mark via social media or dating apps in order to “fatten them up”, before “butchering” them by stealing from them, often through an investment scam.

Revenues from romance scams grew nearly 40 percent year-on-year in 2024, Chainalysis said.

The number of deposits grew 210 percent during the same period, reflecting a larger number of people being preyed upon for smaller pay-offs.

“Crypto fraud and scams have continued to increase in sophistication,” said Chainalysis in a report.

The company said marketplaces have developed to support romance scams through the sale of technology, infrastructure and resources, while generative AI has been used to make it easier and cheaper to expand scam operations.

Generative AI could potentially be used to “exponentially scale crypto scams”, the company said.

Other lucrative scams last year included crypto drainers, where scammers pose as blockchain projects to take control of targets’ wallets, and high-yield investment scams, Chainalysis said.

Crypto drainers

In January of last year a crypto drainer posed as the US Securities and Exchange Commission (SEC) after hacking the SEC’s X social media account.

The incident was separate from another January 2024 hack in which an Alabama man created a fake post on the SEC’s X account in order to manipulate the price of Bitcoin.

Eric Council Jr., 25, pleaded guilty to the hack last week.

Chainalysis said cryptocurrency ATMs have also become hotspots for scams, with scammers impersonating government officials or customer support agents to convince people to deposit cash into the machines.