Chainalysis has published its latest 2024 report on crypto scams, revealing a 40% increase in pig butchering year-on-year, and the involvement of generative AI. Not only that, the analytics company stated that the total amount of crypto stolen last year amounts to 9.9 million dollars on-chain.
Crypto Scam 2024: the rise of Pig Butchering and the involvement of generative AI
Chainalysis has published its latest study “Crypto Scam Revenue 2024”, revealing that in total, scammers have stolen crypto worth at least 9.9 billion dollars on-chain.
This figure is based solely on the inflows to the scam addresses identified so far, and it could turn out to be a record year.
Not by chance, Chainalysis has estimated that since 2020, revenues from crypto scams have increased on average by 24% each year. By 2024, following this trend, the total of stolen crypto could exceed 12 billion dollars.
In any case, among the most profitable types of cryptocurrency scams, there is certainly “pig butchering,” which has seen a 40% year-over-year increase. Specifically, Pig Butchering has experienced a 210% growth in the number of deposits received.
Another type of crypto scam also involves generative AI, which is used to make scams more convincing and difficult to detect. Chainalysis recorded a 1900% increase in flows to AI service providers from 2021 to 2024.
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Crypto Scam 2024 and the arrival of generative AI
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According to the analyses by Chainalysis, generative intelligenza artificiale software is being used to create fake characters for scammers.
In practice, while on one hand generative AI can accelerate legitimate innovation, on the other hand it can make scams more scalable and convenient for malicious actors.
In this regard, Elad Fouks, head of fraud products at Chainalysis and co-founder of Alterya, stated the following:
“Generative AI is amplifying scams, the main threat to financial institutions, enabling high-fidelity, low-cost, and highly scalable frauds that exploit human vulnerabilities. It facilitates the creation of synthetic and false identities, allowing scammers to impersonate real users and bypass identity verification checks. Furthermore, GenAI enables the generation of realistic fake content, including websites and ads, to fuel investment scams, purchase scams, and more, making these attacks more convincing and harder to detect.”
With this technology, scammers can deceive targets and lead them to authorize payments under a false pretense, often known as authorized push payment (APP) fraud.
Pig Butchering and Romantic Scams
Regarding the crypto scam technique of Pig Butchering, it was already discussed in the second update of Chainalysis of the Crypto Crime 2024.
In fact, the technique involves the wrongdoers proceeding to “fatten up” their victims to extract the maximum possible value.
Pig Butchering is a type of romantic scam, as to carry it out, the scammer must build over time a relationship with the victim, through text messages or dating apps, until pushing them to send money to a fake investment opportunity.