Crypto Scams Hit Record $12.4B as ‘Pig-Butchering’ Schemes Surge

Crypto Scams Hit Record $12.4B in 2023, Pig-Butchering Schemes Dominate with $9.9B

  • Cryptocurrency scam revenues hit a record $12.4 billion in 2023, with pig-butchering schemes accounting for $9.9 billion.
  • Scammers are leveraging Artificial Intelligence and expanding operations across multiple countries.
  • Platform Huione Guarantee received $375.9 million in cryptocurrency transactions as a service provider for scammers.
  • Average annual increase in scam activity has been 24% since 2020.
  • Law enforcement faces growing challenges as scammers professionalize their operations and refine tactics.

Cryptocurrency scammers amassed a record $12.4 billion in illicit gains during 2023, with sophisticated “pig-butchering” schemes driving a significant portion of the surge, according to a new report from Chainalysis.

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The pig-butchering phenomenon, named after the practice of “fattening up” victims before exploitation, saw a 40% increase to $9.9 billion in 2023. These schemes involve criminals building trust with targets over time before convincing them to make fraudulent cryptocurrency investments.

Chainalysis researchers identified a concerning trend in the professionalization of crypto scams. Fraudsters are now utilizing artificial intelligence tools and establishing sophisticated networks across multiple jurisdictions, making detection and enforcement increasingly challenging.

The report highlights the emergence of specialized platforms like Huione Guarantee, which allegedly serves as a comprehensive service provider for scammers. The platform, which processed at least $375.9 million in cryptocurrency transactions in 2024, offers various services including money laundering and social media management.

The scammers’ methodology typically involves directing victims to fraudulent investment platforms where they maintain control over the wallets. Once victims transfer funds, they find themselves unable to withdraw their money, and the scammers vanish with the assets.

Historical data shows an alarming trajectory, with scam activity growing at an average annual rate of 24% since 2020. This persistent increase suggests that despite enhanced regulatory scrutiny and law enforcement efforts, cryptocurrency fraud continues to evolve and adapt to countermeasures.

Law enforcement agencies worldwide have achieved some success in dismantling fraudulent operations, but the scale of these scams presents a significant challenge. With artificial intelligence enabling more sophisticated deception techniques, experts warn that stronger protective measures may be necessary to combat the rising tide of cryptocurrency fraud.

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