AI-Powered Crypto Scams: How Artificial Intelligence is Being Used for Fraud

TL;DR

  • AI-powered scams are impacting the crypto industry, as many fraudsters are combining the pseudonymity of digital assets with the automation of AI to exploit users at scale.
  • Common AI-powered scams include deepfakes, phishing bots, fake trading platforms, voice cloning, and impersonation in chat applications.
  • Fortunately, tools like Chainalysis Alterya leverage the same AI technology to fight these scammers, scaling scam detection, automating threat response, and staying ahead of fraud attempts.

As artificial intelligence (AI) tools become more accessible, ubiquitous, and advanced, their applications have exploded across industries — from finance and healthcare, to entertainment and education. But while much of the AI conversation centers around productivity and the future of manual work, a more concerning trend is emerging: cybercriminals are now using AI to supercharge increasingly convincing and scalable scams.

AI-powered scams are also impacting the cryptocurrency industry, as many fraudsters are combining the pseudonymity of digital assets with the automation of AI to exploit users at scale. Unfortunately, these scams are often harder to detect, faster to deploy, and disturbingly convincing.

But AI isn’t just in the hands of bad actors. Chainalysis Alterya is leveraging the same technology to fight back, scaling scam detection, automating threat response, and staying ahead of fraud attempts.

In this blog, we’ll explore the following topics and more:

What are AI-powered crypto scams?

Unlike traditional crypto scams — typically manual and repetitive — AI-powered scams harness the speed, scale, and sophistication of modern machine learning (ML) models. They are therefore more adaptive, harder to spot, and often convincingly human.

At the intersection of AI and crypto lies a perfect storm: crypto is decentralized, fast-moving, and not consistently regulated across jurisdictions. AI adds another layer of deception by creating fake identities, realistic conversations, and websites nearly indistinguishable from the real versions.

Scammers are increasingly turning to AI because it offers scalability, believability, and automation. A single attacker can now deploy thousands of phishing messages, fake support agents, or investment bots — all generated and managed by AI.

The chart below shows the share of the total scam ecosystem made up of known counterparties to AI software vendors. The volume share shows the proportion of total scam inflows to scams that have also sent value to AI software vendors on-chain (representing a likely purchase of AI tools). The deposits share shows that roughly 60% of all deposits into scam wallets on-chain go into scams that leverage AI. Both statistics have been steadily increasing since 2021, around when AI started to reach the mainstream, and show that this ecosystem is increasingly dominated by AI-powered scams.

Common types of AI-powered crypto scams

Here are some of the most common ways malicious actors are using AI in crypto:

  • Deepfake scams: AI-generated videos or images depict trusted public figures, influencers, or executives promoting fraudulent crypto projects or giveaways.
  • AI-generated phishing: Fraudsters craft sophisticated phishing emails, fake websites, and direct messages using AI to mimic natural language and personalize attacks based on a user’s online behavior.
  • Fake investment bots: Scammers deploy AI trading bots that simulate successful trades or offer fake signals to lure users into depositing funds or following questionable financial advice.
  • Fraudulent automated trading platforms: Entire trading websites or mobile apps are built around fake AI trading algorithms that guarantee high returns and siphon deposited crypto.
  • KYC bypass: Scammers use AI-generated images and/or credentials to bypass KYC controls and two-factor authentication (2FA).
  • Chatbot scams: AI-powered bots infiltrate popular crypto communities on Discord and Telegram, and impersonate moderators or project administrators, tricking users into sharing wallet information or clicking malicious links.
  • AI customer support impersonation: Scammers use AI to mimic support agents from exchanges or wallet providers, often in real-time chats, to extract login credentials or recovery phrases.
  • AI-assisted pig butchering scams: Scammers gain a victim’s trust — often over weeks or months — before convincing them to invest large sums into fake crypto platforms, with AI supporting communication and content generation.
  • Voice cloning and real-time scam calls: AI replicates the voice of a known individual — such as a family member, colleague, or executive — to urgently request access to a user’s wallet or crypto exchange account.

Why AI makes crypto scams harder to detect

AI-generated content gives scams a layer of realism that’s often difficult to distinguish from legitimate communication. For instance, phishing emails mirror the tone of official messages, fake landing pages closely resemble real investment platforms, and deepfake videos or synthetic voices add credibility to social media posts and direct outreach.

Scammers are now operating at unprecedented speed and scale. With AI, they can generate thousands of personalized messages, fake profiles, or live chat responses in seconds, enabling real-time deception across multiple platforms and languages. Additionally, identity spoofing and AI-powered customer support impersonation make traditional verification methods less reliable.

The biggest challenge is that legacy fraud detection systems weren’t designed to identify AI-powered scams. Static rules and keyword filters struggle to flag dynamic, AI-crafted content that continuously evolves; this is why AI-powered defenses are all the more important.

How authorities and blockchain analysts are responding

To counter the rise of AI-assisted crypto scams, investigators are turning to advanced detection techniques that go beyond traditional filters. Tools now incorporate pattern recognition, linguistic analysis, and behavioral modeling to identify suspicious activity, such as unusual message phrasing, bot-like behavior, or rapid message replication across platforms.

Blockchain analytics plays a key role in tracing the financial side of these operations. By analyzing on-chain activity, investigators can follow the flow of funds from scam wallets to exchanges or mixers. When combined with off-chain intelligence, these tools help unmask wallet addresses linked to coordinated AI-based fraud.

As is the case with other types of crypto fraud, cross-industry collaboration is essential. Security firms, crypto exchanges, regulators, and law enforcement are working together to share threat intelligence, flag recurring scam patterns, and proactively shut down fraudulent campaigns before they scale.

Protecting yourself and your business from AI-powered crypto scams

Staying vigilant against AI-powered crypto scams starts with knowing what to look for. Deepfake scams often rely on urgency and authority — for instance, a video of a CEO like Elon Musk announcing a limited-time investment opportunity. Look for unnatural blinking, odd mouth movements, or inconsistent lighting.

Phishing attempts may use near-perfect grammar and familiar branding, but often include subtle errors in domain names, crypto wallet addresses, or sender emails. Be cautious of unsolicited messages, even on platforms like Discord or Telegram — especially if they request sensitive information or funds.

Businesses should go beyond basic cybersecurity training by teaching employees how to spot synthetic content and social engineering tactics. Additionally, regular audits of customer support channels, two-factor authentication (2FA), and role-based access controls can help minimize the impact of impersonation attacks. Finally, AI-powered crypto fraud detection solutions like Chainalysis Alterya can help identify scammers in real-time before they reach potential victims.

Book a demo of Chainalysis Alterya’s fraud detection solution here.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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