Crypto wallets related to the fraud said they received $9.9 billion in cryptocurrency in 2024, according to Chain Melt.
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As cybercriminals become more organized using artificial intelligence, it is estimated that crypto fraud revenues reached record levels last year amid a surge in so-called romance scams, according to the Blockchain Survey Company chain analysis warns.
In a report released Thursday, the company said the fraud-related crypto wallet received $9.9 billion in cryptocurrency in 2024, according to initial estimates. As Chain Orisis identifies more fraud wallets, it expects the 2024 figure to grow to a record of $12.4 billion.
Chain Orisys added that annual estimates of fraud activity have increased by 24% over the annual reporting period since 2020.
According to a 2024 report, the main reason for the increase in fraudulent income was the increased prevalence of romance fraud, commonly known as “slaughter of pigs.”
Pig slaughter is a type of investment or romance scam in which a scammer builds relationships with a victim via social media or dating apps, and is intended to pay through fake investment opportunities.
The name “slaughter of a pig” is the idea that the con artist must “fatt” the victim with a bond that has been processed as “flattering” before he can first “slaughter” or steal. It’s coming from.
More casualties were sent to the massacre
In 2024, pig slaughter revenues increased nearly 40% year-on-year, with chain analysis showing an increase in the number of pig slaughter fraud sediments that increased by about 210% over the same period.
The company said these different growth rates indicate an expansion in the victim pool, prioritizing more victims in exchange for less payments.
Pig slaughter fraud mainly comes from large fraud compounds in Southeast Asia, but there are indications such fraud centres are beginning to become more geographically dispersed, the report says.
Last December, Nigerian anti-graft agency announced the arrest of 792 people in raids on a building where suspects were believed to be carrying out romance fraud targeting people in Europe and America. . Reuters.
Romance fraud often relies on victims of human trafficking to commit fraud. an Research by Propublica In 2022, Chinese crime syndicates outlined how victims were trafficked at centres in Cambodia, Laos and Myanmar, forcing them to carry out cyberfloors under the threat of violence.
These scam compounds are often known for carrying out pig slaughter fraud, but also serve as shelter for other types of scams that can be carried out over the internet. Chain melting report.
“It’s not uncommon to have multiple criminal groups working within the same compound that focuses on different frauds,” he added.
Specialisation of fraud ecosystem
The dynamics of multiple criminal groups operating within compounds are embodied online through illegal crypto markets and network creation, according to chain analysis.
This trend is primarily driven by Huione guarantees, with online forums and peer-to-peer marketplace chain Orisys acting as a “one-stop shop” for illegal actors seeking to buy and sell fraud technologies, infrastructure and resources He says that.
The Chinese platform is connected to Huione Group, a Cambodian conglomerate that offers legitimate services such as international remittances, insurance and even in the past luxury tourist products.
According to Chain Orisis, Huione Guarantee activities on the blockchain support the pig slaughter industry and are frequently used for illegal crypto-based transactions of fraudulent technology products and services.
One of the main services hosted on the platform is money laundering, which scammers use to hide illegal activities, according to data from chain analytics.
Meanwhile, illegal products on the site include targeted data lists, web hosting services, social media accounts and AI software. In 2024, the Huione scam technology vendor received at least $375.9 million in cryptocurrency.
Since 2021, Huione Guarantee and vendors promoting advertising through the platform have processed $70 billion in crypto transactions.
“In short, Huione Guarantee has driven and made possible a massive, growing, interconnected fraud ecosystem,” the company said in its report.
Huione Guarantee did not respond to CNBC investigations.
According to CNBC translation of the Chinese statement, in its website disclaimer, the platform does not participate or understand the customer’s specific business and is solely responsible for guaranteeing payment between the buyer and seller. He says that.
Artificial intelligence promotes fraud
In 2024, some of the most successful vendors on the Huione platform were AI service providers, with revenues increasing by 1,900% year-on-year according to chain dissolution data.
This growth marks an explosion in the use of generated AI technologies to promote crypto fraud. This often involves scammers using technology to generate realistic content that disguises others and deceives the victim.
According to a report by ChainAlysis, dozens of software vendors are hosted under Huione Guarantee, which sells this type of fraudulent AI software.
According to Elad Fouks, the head of Chainalysis fraud products and co-founder of the fraud detection app Alterya, cited in the report, using generated AI to amplify and expand crypto fraud and crime You can do it.
“Genai allows for the generation of realistic fake content, including websites and listings, making these attacks more convincing and difficult to detect, including investment scams, purchasing scams, and more.” says Fouks.
Some Huione vendors are promoting “face-changing services” with $200 worth of cryptocurrency.
Openai’s ChatGPT was launched in 2022 and has seen an increase in cases since its popularity has increased. Big companies have lost millions to the Deepfark scam. Such fraud uses generative AI to create synthetic and fake identities and voices that allow scammers to bypass identity verification controls by impersonating real people.
Chainalysis says the possibility of AI technology exponentially scaling cryptographic fraud will further increase the challenges associated with fighting these crimes.
Tackling crypto fraud on a scale requires sustained efforts from government agencies, regulators and organizations, the company said.
