AI Crypto Fraud Activity Skyrockets 500% as Generative AI Empowers Scammers

A report from TRM Labs has highlighted the growing threat of artificial intelligence (AI) in cryptocurrency scams. The firm found that AI crypto fraud activity has increased by 500% over the past year, with AI greatly boosting the scale and speed of crypto hacks.

The use of generative AI in fraud has enabled scammers to automate, customize, and expand their attacks, leading to significant financial losses. According to the report, AI helps hackers to quickly write and design phishing emails and fake investment websites, as well as create realistic chatbots.

Large language models (LLMs) are also being used by scammers to create personalized messages with a higher chance of engagement. Additionally, AI translation tools enable fraudsters to localize scams across languages and regions, while deepfake audio and video technology allows them to mimic executives, romantic partners, or public figures with increasing realism.

The report notes that machine learning tools can test stolen usernames and passwords in bulk, allowing scammers to quickly gain access to funds. Furthermore, AI can identify weaknesses in smart contracts and help hackers attack entire blockchain protocols.