A recent investigation by the IRS Criminal Investigation New York Field Office has shed light on the rising trend of crypto fraud schemes being fueled by artificial intelligence.
The scammers use AI tools available on the dark web to target victims, often using tactics such as urgency and emotional manipulation. These tactics can be highly effective, as seen in the case of Kyle Holder, a 73-year-old woman who lost her life savings of $300,000 to a sophisticated scam.
Holder's case was one of thousands reported in 2025, with over half of the estimated $20 billion in cyber theft being attributed to cryptocurrency scams. The scammers used AI tools to write scripts that targeted Holder specifically, making it difficult for her to resist their demands.
The scammers then consolidated Holder's money with other victims' funds and off-ramped more than $5 million in cryptocurrency without being caught. The IRS Criminal Division has set up an online tipline for cases like Holder's, urging victims not to be ashamed and to report suspicious activity as soon as possible.