The role of AI in the rise of crypto fraud

The cryptocurrency market has always been controversial and rife with numerous scams. Time goes by, but the scammers aren’t going anywhere. What’s more, they’re developing new schemes and streamlining their operations with the help of AI.

TRM Labs (an American technology company that tracks blockchain analytics and works to detect and combat financial crimes in the cryptocurrency sector) stated in its report that scammers are now becoming more sophisticated thanks to AI. The schemes are larger in scale and operate faster.

In 2025, the volume of illegal cryptocurrency transactions reached $158 billion. Fraud alone accounted for $17 billion, but these are only confirmed cases. Overall, the average transfer amount for victims of fraudulent schemes rose from $800 in 2024 to $3,000 in 2025. It is said that this surge occurred precisely because of fraudsters’ use of AI.

Today we’ll discuss how AI helps fraudsters and why schemes using neural networks are more effective than traditional ones.

AI-powered fraud: What it is and how it works

AI fraud refers to financial crimes where artificial intelligence is used to personalize, automate, and scale scams.

Previously, these schemes relied on human labor. Imagine a situation where a scammer impersonates someone else or pretends to be technical support, etc. To pull this off, scammers had to assemble entire teams of employees working in different areas, who spoke multiple languages, and so on. You can imagine how many resources such a process consumes; consequently, it becomes harder to operate, and profits are lower.

But with the advent of AI, everything has changed. Now it can replace an entire team, is cheaper, and eliminates many of the limitations that existed before. The scammers’ work is simplified and accelerated as much as possible. Because AI creates fake investment sites and phishing emails in just a couple of minutes. It generates realistic chatbots posing as technical support, perfectly tailors messages to different demographic groups, and provides automatic translation for specific countries.

So you can see for yourself that creating fake but highly realistic token recommendations and messages on behalf of an exchange is no problem at all.

A key feature of artificial intelligence is its ability to adapt to the user and craft compelling narratives. The bot can handle multiple conversations simultaneously, retaining context and maintaining consistency. It builds trust in the offer, and its messages often come across as far more convincing than those written by humans.

But there is one thing (or perhaps more than one): AI-based fraud doesn’t end with contacting victims. It is much more extensive. For example, it is often used to optimize money laundering schemes, test stolen login credentials, and other things we could talk about endlessly. The point is that AI’s capabilities are far broader than we imagine. We believe that fraudsters won’t stop here and will continue to devise new schemes. 

Another important aspect is the speed of scaling. When it comes to “manual” fraud, it grows gradually and not as rapidly. The same cannot be said for AI fraud. Here, the situation depends on the growth of computational resources. As you know, neural networks are evolving almost daily. So is AI fraud.

In summary

AI undoubtedly speeds up fraudsters’ work and allows them to scam more users and larger sums.

Key points:

• Faster
• Cheaper
• More profitable

BUT: Scammers’ use of artificial intelligence doesn’t make them invisible. On the contrary—there’s another side to the coin. AI gets “exposed” faster, even though it brings them more money and eliminates many inconveniences.