Chainalysis Predicts Crypto Scam Revenue to Increase in 2025
Date: 2025-02-14 Author: Henry Casey Categories: BUSINESS
Blockchain analytics company Chainalysis has released its Crypto Scam Revenue 2024 report, predicting a significant increase in cryptocurrency scam revenue by 2025.
According to the study, scams are becoming increasingly sophisticated thanks to the use of generative artificial intelligence (AI) and professional services that support scammers. In 2024, cryptocurrency scams will generate $9.9 billion in revenue, with “pig butchering” schemes posing the biggest threat. This type of fraud relies on a long-term relationship with a victim who is then convinced to invest in fake projects. Chainalysis predicts that the amount of illicit revenue could exceed $12 billion, as new scam addresses are constantly being identified.
Elad Fuchs, Head of Fraud at Chainalysis, notes that generative AI has made it much easier for fraudsters to scale. The technology allows them to create fake identities and bypass identity verification. According to him, 85% of fraudulent transactions are conducted through fully verified accounts, which makes them more difficult to detect. In addition, AI is able to generate fake websites and advertisements, making fraudulent schemes even more believable.
The report also focuses on the growing sophistication of fraudulent operations in the crypto industry. In particular, Chainalysis highlights the Huione Guarantee platform, which provides services for various transactions, including illicit schemes. According to the company, revenue from AI services used by fraudsters increased by 1,900% in 2024, indicating a rapid increase in the use of new technologies in criminal schemes.
The FBI warned back in December about the increased use of generative AI by cryptocurrency investment scammers. Deloitte analysts also note that AI technologies and deepfakes could cause $40 billion in damage to the US economy by 2027.
Chainalysis highlights that annual losses from crypto fraud have grown by an average of 24% since 2020. Although the total volume of illegal transactions could reach $51 billion in 2024, the share of fraudulent transactions in the overall crypto market has fallen to its lowest level in three years.
The company's analysts predict that real losses from fraud, especially those involving AI technologies, may be even higher than current estimates.
