Cryptocurrency Scams Surge 24% in 2024, Costing $4.6 Billion

In 2024, the cryptocurrency landscape faced a significant challenge as scams resulted in a staggering loss of $4.6 billion, marking a 24% increase from the previous year. This alarming trend was highlighted in a joint research report by Bitget, SlowMist, and Elliptic, which identified deepfake AI impersonation, social engineering scams, and modern Ponzi schemes as the primary threats to users.

Deepfake technology has emerged as a particularly insidious tool for scammers. Nearly 40% of high-value frauds in 2024 involved the use of AI to create convincing videos of public figures, such as Elon Musk, promoting fake investments on social media platforms. In one notable case, authorities arrested 31 members of a syndicate that used AI-generated videos of various crypto executives to steal $34 million. Scammers are also leveraging AI to bypass Know Your Customer (KYC) procedures, forge customer service chats, and simulate platform dashboards to create a false sense of legitimacy. Even Zoom meetings are being exploited, with scammers sending fake invitations that lead to malicious software.

Social engineering remains a significant threat, exploiting people’s psychological vulnerabilities. AI-powered arbitrage bot scams promise easy profits through ChatGPT-generated code, directing users to interact with fake interfaces that steal their funds. Other common tactics include Trojan-laced job offers, phishing links in direct messages and tweets, and address poisoning.

Modern Ponzi schemes have also evolved, now appearing as legitimate decentralized finance (DeFi), NFT, and GameFi projects. The 2023 JPEX incident serves as a stark example, where the platform promoted itself as a “global cryptocurrency exchange” using physical ads and celebrity endorsements to market its native JPC token. However, the platform lacked regulatory approval, leading authorities to label 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 exposed a scam network linked to several rug pulls, including Leaper Finance and Zebra Lending. These rackets use forged KYC documents and fake audit reports to lure users before stealing funds right after the value of their phony tokens surges. Modern digital swindles differ from traditional Ponzi schemes by incorporating more sophisticated elements, such as advanced “social fission” tactics that use messaging apps and livestreams to drive user-based recruitment, as well as gamified interfaces and fake identities.

In response to the growing threat posed by fraudsters, Bitget, SlowMist, and Elliptic have launched an Anti-Scam Hub. This initiative aims to trace illicit funds, disrupt phishing networks, and identify deceptive behavior across blockchains. Arda Akartuna, Lead Crypto Threat Researcher at Elliptic, emphasized the need for continuous evolution in technology and blockchain capabilities to track and identify new methods used by criminals. A protection fund worth over $300 million is also being deployed to mitigate user risks.