Chainalysis said that according to its initial estimates, crypto wallets related to the scam received $9.9 billion in cryptocurrency in 2024.
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Crypto fraud revenue is estimated to reach record levels last year as so-called romantic scams surge and become more organized as cybercriminals exploit artificial intelligence, blockchain research firm chain analysis warns.
In a report released Thursday, the company said that based on its initial estimates, crypto wallets related to the scam received $9.9 billion in cryptocurrency in 2024. It predicts that the figures will grow to $12.4 billion in 2024 as chain analytics determines more scam wallets.
Chain Analytics added that its annual estimates of scam activity have increased by an average of 24% between the annual reporting period since 2020.
According to its 2024 report, the main reason for the rise in scam revenue is the increased prevalence rate in romance, often referred to as the “pig slaughter.”
Pig slaughter is an investment or romantic scam where fraudsters build relationships with victims through social media or dating apps, intending to get rid of money through fake investment opportunities.
The name “pig slaughter” comes from the idea that scammers must first “cowhide” with flattery and fabricated bonds or steal their money before “making the victims” disguised and fabricated bonds.
More victims were killed
According to Chainalysis, in 2024, pig slaughter revenues are getting closer to 40%, while the number of deposits in pig slaughtered increased by nearly 210% during the same period.
The company said the different growth rates indicate an expansion of the victim pool, with more victims prioritizing in exchange for smaller payments.
Although the pig slaughter scams are mainly from large scams in Southeast Asia, there are signs that the centers of such scams have begun to become more geographically dispersed, the report said.
In December, Nigeria’s anti-corruption agency announced the arrest of 792 people in a raid on a building, and the suspects are believed to be committing romantic scams, mainly from Europe and the Americas. Reuters.
Romantic scams often rely on victims of trafficking to commit fraud. one ProPublica’s Investigation In 2022, it outlines how Chinese criminal groups have trafficked victims to the centers of Cambodia, Laos and Myanmar, forcing them to perform cyber brutality under the threat of violence.
Eric Heintz, a global analyst for the International Justice Mission, said the scams are often known for their slaughter of pigs, but they also serve as safe havens for other types of fraud that can be done through the Internet. Chain analysis report.
“It is not uncommon for multiple criminal groups to operate with different scams in the same compound group.”
Scam ecosystem “specialization”
According to Chainalysis, the dynamics of multiple criminal groups operating in compounds have also been implemented online by creating illegal crypto markets and networks.
First, the trend is driven by Huione assurance, an online forum and peer-to-peer market chain analysis says it is a “one-stop” for illegal players seeking technology, infrastructure and resources to engage in scams.
The Chinese platform is connected to Huione Group, a Cambodian corporate group that provides legal services such as overseas remittances, insurance, and even the past, even the luxury tourism industry.
According to Chainalysis, Huione guarantees activity on blockchain shows that it has been used to support illegal transactions of scam products and services based on illegal encryption technology.
According to chain analysis data, one of the main services that can be found on the platform is money laundering, which scammers use to hide their illegal activities.
Meanwhile, some illegal products found on the website include targeted data lists, web hosting services, social media accounts and AI software. In 2024, Huione Scam Technology suppliers received at least $375.9 million in cryptocurrency.
Since 2021, Huione guarantees and vendors advertising through its platform have processed $70 billion in crypto transactions.
“In short, Huione’s assurance drives and enables a large-scale, growing and interconnected scam ecosystem,” the company said in its report.
Huione Group did not respond to CNBC queries.
Artificial intelligence helps scams
In 2024, some of the most successful vendors on the Huione platform were AI service providers, with revenues up 1,900% year-on-year, according to chain analytics data.
This growth suggests the use of generative AI technology to facilitate the explosion of crypto scams, which often requires the use of this technology to imitate others or produce realistic content, allowing victims to deceive victims into making false investments.
Chainalesy’s report says dozens of software vendors hosted on Huione guaranteed to sell this type of SCAM AI software.
According to Elad Fouks, head of fraud product at Chain Analysis, Appya, co-founder of the fraud detection app cited in the report, said that generating AI can be used to amplify and scale crypto fraud and crime.
“Genai enables realistic fake content (including websites and lists) to generate investment scams, purchase scams, etc., making these attacks more persuasive and difficult to detect,” Fox said.
Some Huione’s suppliers even used $200 in cryptocurrency as a “change-oriented service.”
More and more cases have been seen since Openai’s Chatgpt launched in 2022 and sees its popularity grow Big companies lose millions of dollars in scam. Such scams use generated AI to create synthetic and fake identities and voices, allowing fraudsters to imitate real people and bypass authentication controls
Chainalysis said the potential of AI technology to expand crypto scams further adds to the challenges associated with these crimes.
The company said that a massive resolution of crypto scams would require ongoing efforts from government agencies, regulators and organizations.
