Crypto thieves will deploy more convincing AI scams by 2024, companies warn.
AI-powered phishing scams, BRC-20 exploits and new smart contract vulnerabilities are among the biggest threats crypto projects and investors will face in 2024, according to blockchain security firms.
In the year $1.7 billion in fraud and hacking-related losses by 2023 While it's an undeniable improvement with $4 billion lost by 2022 – blockchain analyst Jesse Leclerc from Certike warns Cointelegraph that scams are only getting better and users need to stay on top. Be alert for well-executed exploits.
“Phishing, with its ever-increasing sophistication, targets not only individual users but also corporate systems. […] using social engineering tactics tailored to the crypto context,” said LeClair, pointing to the December 14 Ledger Connect exploit as a prime example of an advanced attack.
One of the key aspects of phishing scams is the use of generative AI, which allows hackers to automate operations and create convincing fake calls, videos and messages, he says.
As predicted, Generative AI cheats are here now. These will be dramatically better in 12-24 months and it will be difficult for anyone to distinguish between reality and AI fiction https://t.co/u7uaIEUodt
— Charles Hoskinson (@IOHK_Charles) December 15, 2023
Jenny Peng, research analyst at 0xScope, warned that AI could become a key component in creating ever more plausible “deep lies” to fool crypto users.
Peng added that hackers will “focus more” on the growing BRC-20 ecosystem next year due to the relative lack of security developments.
“BRC-20 UniSat wallet in 2018. It launched in early 2023 and was immediately hit with a double-spending exploit. This event shows that the BRC-20 ecosystem, where everything is new, needs to rapidly develop its infrastructure to battle-test the security of Ethereum,” she added.
Already one of the industry's longest-running pain points, cross-chain bridges will continue to be a concern in 2024, Leclair said.
#PeckShieldAlert @MultichainOrg has leaked ~$126M worth of cryptos, which is #6 on the cross-chain bridge exploit leaderboard. Additionally, #PolyNetwork is at #8 with $25M in revenue.
~$1.92B linked to cross-chain bridges as of today… pic.twitter.com/UvJF8BwQfs
— PeckShieldAlert (@PeckShieldAlert) July 7, 2023
“As the industry embraces cross-chain solutions for greater interoperability, these protocols become an attractive target for attackers exploiting vulnerabilities arising from the complex interactions between different protocols and chains,” he added.
Many of the crypto sector's biggest hacks have been caused by bridge exploits – the notorious $650 million Ronin Bridge hack is still the worst on record. Without some serious safety improvements in the future, Leclerc believes this will remain an issue for the industry heading into 2024.
Meanwhile, Phil Larratt, director of research at Chinalysis, issued a similar warning, warning that bad actors are becoming more sophisticated in trying to salvage their ill-gotten gains.
Related: $3M Crypto Stolen On Christmas Day – MS Drainer Fraudsters Drain Victims
“In 2024, we can expect illegal actors to become more sophisticated in their tactics and techniques, particularly as long-established traditional organized crime and financial criminals continue to use cryptocurrencies,” he said.
With increasing awareness from security firms and law enforcement agencies, he warns that the next wave of fraudsters will use privacy coins, bridges, hashing and other hacking tools to a greater extent.
“To respond to this trend, we need more intensive law enforcement investigations, increased training and knowledge sharing among law enforcement agencies, more advanced fraud protection programs, and continued partnerships between the public and private sectors,” he said.
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