According to a recent crypto crime report by Chainalysis, 2024 saw a decline in overall crypto scam revenue. However, the year still set a record in total scam-related inflows, as the current figures represent lower-bound estimates based on identified scam addresses to date.
Among scam sub-classes, high-yield investment scams (HYIS) and pig butchering scams accounted for the highest shares, receiving 50.2% and 33.2% of total scam-related crypto transactions, respectively.
The Expansion of Pig Butchering Scams
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Pig butchering scams, also known as investment or romance scams build relationships with victims, convincing them to invest in fraudulent schemes. Initially concentrated in large scam compounds in Southeast Asia, these scams have reportedly expanded geographically over the past two years. While operations in Southeast Asia remain dominant, newer scams are emerging in different regions.
In addition to traditional long-term cons that involve months or even years of grooming victims before extracting payments, pig butchering scammers have diversified their tactics. A notable shift includes employment and work-from-home scams, which yield smaller but quicker victim deposits.
For example, a fraudulent job platform impersonating a record label funneled crypto funds into addresses linked to pig butchering scams, as confirmed by Proofpoint cybersecurity researchers. Chainalysis further connected these scams through shared on-chain addresses.
Although employment scams accounted for less than 1% of total on-chain scam revenue in 2024, thousands of victims fell for fake job postings, prompting an FBI warning in the U.S. Scam operators are also adapting to the traceability of cryptocurrency, increasingly directing victims to contact “customer service” representatives to obtain crypto payment addresses or even avoiding cryptocurrency payments altogether in favor of alternative financial channels.
In 2024, five scam types experienced growth:
- Pig butchering
- Address poisoning
- Crypto drainers
- Livestream scams
- Blackmail and extortion scams
Where scammers send illicit crypto
In the last few years, destinations for scammed funds have remained relatively the same, with most funds going to centralized exchanges (CEXs). But as scams on more blockchains including Ethereum, Tron, and Solana have grown, so too has the use of DeFi protocols.
Since mid-2023, crypto sent from scams to Huione money laundering services has also grown. Money laundering is just one type of illicit activity the Huione Guarantee platform supports, among a host of services that facilitate scams.
Additionally, crypto transactions linked to Huione money laundering services have risen significantly. Huione Guarantee, an online marketplace affiliated with Cambodian conglomerate Huione Group, has been identified as a major enabler of crypto-based scams. Originally offering legitimate financial services such as remittances and insurance, Huione Guarantee has evolved into a hub for illicit cyber activities, processing an estimated $70 billion in crypto transactions since 2021.
Huione Guarantee provides illicit actors with the necessary technology, infrastructure, and resources to conduct scams.
Key offerings include:
- Targeted data lists
- Web hosting services
- Social media account management
- Al-driven content creation
- Money laundering services
The Role of Al in Facilitating Crypto Scams
Generative Al is increasingly being leveraged to enhance scam sophistication and efficiency. According to Elad Fouks, head of fraud products at Chainalysis and co-founder of Alterya, Al is amplifying scams by enabling high-fidelity, low-cost fraud that exploits human vulnerabilities.
Al allows fraudsters to do the following:
- Create synthetic identities to bypass identity verification systems
- Generate realistic fake websites and listings for investment and purchase scams
- Enhance authorized push payment (APP) fraud, convincing victims to authorize fraudulent payments
Conclusion
Despite an overall decline in scam revenue, crypto-related fraud remains a pervasive issue in 2024, evolving with technological advancements. The proliferation of Al-driven scams, employment fraud, and money laundering platforms like Huione Guarantee underscores the growing complexity of illicit crypto activity. As scams become more sophisticated and geographically diverse, regulatory and enforcement measures must adapt to counter emerging threats in the crypto landscape.