Crypto fraud reached unprecedented levels in 2024, with scammers leveraging AI and more sophisticated tactics to deceive victims. According to a new report by blockchain research firm Chainalysis, cryptocurrency wallets linked to fraudulent schemes received $9.9 billion in 2024.Â
However, as more scam-linked wallets are identified, Chainalysis predicts the total for the year could rise to a record $12.4 billion.
Romance Scams Drive Crypto Fraud Growth
The firm’s data shows that scam revenues have increased by an average of 24% annually since 2020, highlighting the growing scale of crypto-related fraud. Among the leading causes of this rise is the surge in romance scams, commonly known as “pig butchering.”
Romance scams have become one of the most lucrative fraud schemes, targeting individuals through online relationships and tricking them into sending money under false investment pretences.Â
Chainalysis found that “pig butchering” scams accounted for 33.2% of all crypto fraud revenue in 2024, marking an almost 40% increase from the previous year.
Another major fraud category was high-yield investment scams (HYIS), which pulled in 50.2% of total scam revenue in 2024. These scams promise outsized returns to investors but operate as Ponzi schemes, using funds from new investors to pay off earlier ones.
However, despite making up the largest share of scam revenue, inflows into HYIS declined by 36.6% year-over-year (YoY).
Smart Business Corp: A Decade-Old Ponzi Scheme Thrives
One of the most active high-yield investment scams in 2024 was Smart Business Corp, a Ponzi scheme that primarily targets Spanish-speaking countries, particularly Mexico.
Originally launched a decade ago, the scheme added Bitcoin to its investment portfolio in 2022, promising lucrative returns through a tiered investment system.
That same year, Mexico’s consumer protection agency CONDUSEF warned that Smart Business Corp was not authorized to offer securities in the country. Despite this, the scam has continued to attract investors, amassing $1.5 billion in on-chain cryptocurrency transactions.
Scammer Services and Laundering Networks
Scammers are also benefiting from specialized platforms that facilitate fraudulent activities. Chainalysis identified Huione Guarantee, a peer-to-peer marketplace that has become a crucial resource for crypto criminals.
Huione Guarantee, according to Chainalysis, received at least $375.9 million in cryptocurrency in 2024. The platform offers money laundering services, social media management, and stolen data sales, effectively serving as a “one-stop-shop” for scammers.
This demonstrates how fraudsters are evolving beyond simple investment scams and into sophisticated, organized crime operations.
Authorities Face an Uphill Battle Against Crypto Fraud
Despite efforts by global law enforcement agencies to track and dismantle fraudulent operations, the sheer scale of scams presents a significant challenge.
Many fraudsters operate across multiple jurisdictions, making it difficult to take legal action or recover stolen funds.
Additionally, the rise of AI-powered deception has made scams even harder to detect. AI-generated messages, deepfake videos, and automated scam bots allow fraudsters to build more convincing schemes, increasing their chances of deceiving victims.
Chainalysis warns that more aggressive countermeasures may be necessary to curb crypto fraud. Governments and regulators worldwide must enhance monitoring, improve consumer education, and work more closely with blockchain analytics firms to identify and shut down scam networks.
Also Read: FBI’s Operation Level Up Saves Americans $285 Million From Crypto Scams