AI Deepfakes Fuel $4.6B Crypto Scam Epidemic – Here’s What You Need to Know
Crypto scammers just leveled up—and your wallet’s in the crosshairs. A new report reveals how AI-powered deepfakes are turbocharging fraud in digital asset markets, with losses skyrocketing to $4.6 billion.
How the scams work
Forged celebrity endorsements. Fake blockchain audits. Even synthetic ‘CEOs’ pitching fraudulent projects. Deepfake technology is giving fraudsters Hollywood-grade tools to manipulate investors—and they’re using them ruthlessly.
The compliance paradox
While regulators scramble to keep up, the scams exploit crypto’s decentralized nature. ‘It’s like playing whack-a-mole with a hydra,’ admits one blockchain forensic analyst. ‘For every exit scam we trace, three more pop up.’
Silver lining?
The losses represent just 0.8% of crypto’s total market cap—roughly what Wall Street loses to lunch expense fraud annually. Maybe decentralized finance isn’t the problem… just an unflattering mirror.
The Most Common Frauds
The report revealed that nearly 40% of high-value frauds in 2024 involved deepfake technology. Scammers are using AI to create convincing videos of public figures like X owner Elon Musk promoting fake investments on social media platforms. In one high-profile case, Hong Kong police arrested 31 members of a syndicate that used AI-generated videos of various crypto executives to steal $34 million.
According to the survey, bad actors are also using AI to bypass KYC procedures, forge customer service chats, and simulate platform dashboards to fake legitimacy. Even Zoom meetings are being weaponized, with scammers sending fake invitations with links to malicious software.
Social engineering remains a major threat by exploiting people’s psychological vulnerabilities. This is being done through AI-powered arbitrage bot scams that promise easy profits through ChatGPT-generated code while directing users to interact with fake interfaces that steal their funds. Other common tactics include Trojan-laced job offers, phishing links in DMs and tweets, and address poisoning.
Additionally, modern Ponzi schemes continue to evolve, now appearing as legitimate decentralized finance (DeFi), NFT, and GameFi projects. The report cited the 2023 JPEX incident in Hong Kong, where the platform promoted itself as a “global cryptocurrency exchange,” using physical ads and celebrity endorsements to market its native JPC token, which supposedly had “high and stable returns.”
However, the platform did not have regulatory approval, leading to authorities tagging it as “highly suspicious.” A subsequent crackdown revealed over $213 million in losses from more than 2,600 complaints by aggrieved users.
Last year, blockchain investigator ZachXBT also exposed a scam network linked to several rug pulls, including Leaper Finance and Zebra Lending. Such rackets use forged KYC documents and fake audit reports to lure users before stealing funds right after the value of their phony tokens surges.
According to Bitget, modern digital swindles differ from traditional Ponzi schemes by incorporating more sophisticated elements. These include advanced “social fission” tactics that use messaging apps and livestreams to drive user-based recruitment, as well as gamified interfaces and fake identities.
Anti-Scam Initiative
Bitget, SlowMist, and Elliptic have also announced the launch of an Anti-Scam Hub to respond to the growing threat posed to crypto by fraudsters. The initiative will be used to trace illicit funds, disrupt phishing networks, and identify deceptive behavior across blockchains.
“Criminals are constantly evolving their methods of attack, using AI and finding new ways to scale their activities,” Arda Akartuna, Lead Crypto Threat Researcher at Elliptic. “This means that reciprocally, we are also working to scale our technology and blockchain capabilities to track and identify the new methods criminals are using.”
A protection fund worth more than $300 million is also being deployed to mitigate user risks.
