Surge in Crypto Scams: A Record $12.4 Billion in 2023
According to blockchain analytics firm Chainalysis, cryptocurrency scammers may have amassed an astonishing $12.4 billion in 2023, marking a significant rise driven largely by the proliferation of so-called pig-butchering schemes. This term refers to a deceptive practice where fraudsters gradually gain their victims’ trust before persuading them to invest in fraudulent cryptocurrency ventures. The name is derived from the method of fattening livestock before they are slaughtered.
Chainalysis reports that fraudsters’ earnings from these schemes grew by 40%, totaling at least $9.9 billion last year. Despite intensified efforts by law enforcement agencies globally to tackle these operations, scammers have adapted and refined their strategies, leveraging advanced technologies such as artificial intelligence. They are also broadening their networks across various countries, which has contributed to their increasing professionalism, as indicated in the report.
The overall incidence of scam activity has risen by an average of 24% per year since 2020, underscoring the growing challenge faced by authorities. Chainalysis pointed out platforms like Huione Guarantee, a peer-to-peer marketplace that serves as a comprehensive resource for scammers. This platform offers essential services ranging from money laundering and social media management to the sale of sensitive data. Notably, Huione Guarantee reportedly received at least $375.9 million in cryptocurrency in 2024.
Fraudsters typically lure victims to counterfeit investment platforms, coaxing them into transferring funds to digital wallets that the scammers control. Once these funds are sent, victims find themselves unable to withdraw their investments, and the scammers vanish without a trace.
Although authorities have made strides in tracing and dismantling fraudulent operations, the sheer scale of these scams presents significant hurdles. With the ongoing rise of AI-driven deception tactics, Chainalysis cautions that more proactive and aggressive measures will be essential in combating crypto-related fraud in the future.
Disclaimer: Portions of this article were generated with the assistance of AI tools and subsequently reviewed by our editorial team to ensure both accuracy and alignment with our standards. For further details, please refer to CoinDesk’s comprehensive AI Policy.
