2024 saw crypto scams raking in a minimum of $9.9 billion in ill-gotten gains, according to a recent report by Chainalysis, the primary culprit being the rise of “pig butchering” frauds.
Scammers often blend investment cons with catfishing schemes in what’s known as pig butchering. The trick involves establishing rapport with the victim and eventually persuading them to put money into non-existent cryptocurrency ventures after building their trust.
Chainalysis Reveals Growing Threat of Pig Butchering Scams
As a crypto investor, I find it concerning that Chainalysis’s initial estimate of $9.9 billion in crypto scam revenue for 2024 might be understated. The actual figure could potentially climb even higher, possibly surpassing $12 billion. The report underscores a nearly 40% increase in pig butchering incidents year over year, contributing to a significant 33.2% of the total crypto scam earnings. This trend suggests that we should remain vigilant and careful when investing in digital currencies.
As a researcher delving into this topic, I’ve discovered that a significant number of these suspicious activities seem to have their roots in Southeast Asia. Notably, the report underscores the growing intricacy of these cybercriminals, referencing illicit services like Huione Guarantee. This platform operates on a peer-to-peer (P2P) basis, providing a space for fraudulent activities. More specifically, it’s a Telegram marketplace catering to Southeast Asian scammers, including those involved in the notorious pig butchering scams.
On this platform, scammers gain access to resources for money laundering, pilfered personal data, and social media administration tools. Since the year 2021, it’s been alleged that Huione Guarantee has handled more than $70 billion worth of cryptocurrency transactions, effectively establishing itself as a key player in the world of fraud.
The study additionally uncovered that Huione Guarantee has recently introduced two new ventures: the USDH stablecoin and the blockchain project Xone. This introduction has sparked worries about potential paths for scammers to mask their financial dealings.
The report provides strong support for a recent occurrence where Tether halted 29.62 million USDT associated with Cambodian criminal activities related to the Huione Group. Notably, Elliptic recently unveiled Huione Guarantee as a vast platform, estimated in billions, that caters to online fraudsters.
Generative AI and Other Crypto Fraud Methods
Additionally, Chainalysis emphasizes that advanced AI technologies, particularly generative ones, are being used by scammers to refine their deceptive strategies even more effectively. This allows these individuals to mimic victims’ identities and evade identification checks. Furthermore, they can construct sophisticated fake investment opportunities with remarkable authenticity.
Besides pig butchering scams and advancements in generative AI, various other forms of crypto fraud also witnessed significant expansion in the year 2024.
- Address Poisoning: Scammers send small transactions from addresses, mimicking a victim’s contacts and tricking them into transferring funds to fraudulent wallets.
- Crypto Drainers: Phishing attacks increased by 170%, with incidents involving fake US Securities and Exchange Commission (SEC) airdrops.
- Livestream Scams & Sextortion: AI-generated deepfake scams and blackmail tactics have become more common.
- Employment Scams: Fraudsters impersonate legitimate companies, tricking victims into paying fraudulent training fees or tax deposits.
It appears that the number of cryptocurrency ATM scams has significantly grown. As per Chainalysis, the FBI reported a staggering tenfold increase in consumer losses since 2020. These criminals often take advantage of these ATMs to collect money from victims who believe they are making legitimate transactions.
Crypto ATMs serve a legal function but are also favored by fraudsters. In recent times, the FBI has been inundated with numerous complaints alleging that these machines have been exploited by cybercriminals as a means to collect payouts from scams.
According to Chainalysis, there’s an instance where scammers tricked a U.S. resident into depositing $15,000 into Bitcoin Automated Teller Machines, under the false claim of resolving a computer virus. Fortunately, authorities managed to retrieve some of the funds after their intervention.
According to their research, Chainalysis recognizes that law enforcement faces increasing hurdles in tackling cryptocurrency fraud. Although centralized exchanges are still the main avenue for washing illegal money, the emergence of decentralized finance platforms makes it harder to trace assets.
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2025-02-14 17:40