In 2024, cryptocurrency fraudsters received at least $9.9 billion through on-chain transactions, but the actual amount is likely to be higher as additional illegal addresses associated with fraud are discovered. This was reported by the analytical company Chainalysis.
Chainalysis predicts that after additional addresses of crypto fraudsters are discovered, the total amount they received in 2024 through on-chain transactions (which take place directly on the blockchain) could exceed $12 billion.
The most popular scheme is High Yield Investment Scams (HYIS), which is based on a pyramid scheme. This scheme promises an unreasonably high return on investment by paying money to previous investors for funds invested by new participants. It is responsible for 50.2% of all funds received by fraudsters.
Although HYIS remains the most popular scheme, its share of crypto fraud decreased by 36.6% compared to 2023. At the same time, pig butchering, also known as romance fraud, increased by 40% year-on-year to 33.2%.
The name "pig slaughter" comes from the fact that crypto fraudsters "fatten" their victims. They first create long-term relationships, often of a romantic nature, with victims and then push them to invest or deposit cryptocurrency in shell companies.
Chainalysis also notes that crypto fraudsters are actively using generative artificial intelligence for their schemes. In particular, this technology helps to create realistic fake identities, which allows fraudsters to impersonate genuine users and bypass identity verification procedures. According to Alterya, 85% of frauds use accounts that successfully bypass traditional identity verification.
"Additionally, GenAI enables the generation of realistic fake content, including websites and listings, to power investment scams, purchase scams, and more, making these attacks more convincing and harder to detect,"said Elad Fouks, Head of Fraud Products at Chainalysis and co-founder of Alterya.