Top 5 AI-Driven Crypto Crime Trends: Elliptic

Blockchain analytic firm Elliptic recently released an extensive report titled “The State of AI-Enabled Cryptocrime: Emerging Types and Trends.” This report sheds light on the alarming development of artificial intelligence (AI) to facilitate various crypto crimes.

While AI is a game changer for many industries, its misuse in crypto is becoming a concern.

How AI Is Changing Cryptocrime: An Elliptical Insight

The Elliptical Report identifies five main types of use of AI in crypto crimes. The first and probably the most popular is the use of AI-generated deep fakes. Fraudsters often use fake pictures or videos of public figures to create convincing scams.

For example, fraudsters have used elaborate impersonations such as Elon Musk and former Singaporean Prime Minister Lee Hsien Loong to promote fraudulent investment schemes. Fraudsters scam unsuspecting investors and spread the word on social media platforms like TikTok and X.com. To combat these scams, Elliptical recommends looking for certain red flags.

Read More: How Artificial Intelligence (AI) Will Change Crypto?

“Fortunately, there are a number of red flag indicators that can help prevent you from falling victim to deep-pocketed scams. To ensure video accuracy, you can make sure lip movements and voices are out of sync, make sure shadows are where you expect them to be, and make sure facial movements like blinking are natural,” Elliptic said.

Another prevalent crime facilitated by AI is fraudulent token creation. On many blockchains, it is relatively easy for fraudsters to create a new token before implementing a “rogue-pool” or “pump-and-good” scheme.

Symbols with AI-referencing names like “GPT” were particularly popular targets. Elliptical's investigation revealed several exit scams involving such tokens, emphasizing the importance of vigilance in token investments.

Cybercriminals have chosen large language models such as ChatGPT to aid their illegal activities. These AI tools can generate new code or audit existing code, which can be misused to identify and exploit vulnerabilities.

While companies such as Microsoft and OpenAI have reported malicious use by state actors from Russia and North Korea, the technology has not yet reached the point where it can consistently facilitate successful cyberattacks. However, the emergence of unethical AI tools such as HackedGPT and WormGPT on dark web platforms poses a serious threat to phishing, malware creation and hacking.

The intersection of AI and Crypto: Opportunities and threats revealed

Another area that AI is influencing is the automation of fraud deployment. Some scams involve creating fake investments, airdrops, or donation sites that are widely promoted through social media and messaging apps.

Once exposed, these sites are abandoned and the process begins with new sites and marketing. AI is being used to streamline this cyclical process, making it more efficient and harder to find.

Identity theft and the creation of fake documents are the main features of the dark web. Now, some services are incorporating AI to expand their operations. For example, one document delivery service advertised using AI to produce high-quality fake IDs and passports.

“Elliptic has identified a crypto address that can be used to pay for this service that has received enough payments to generate less than 5,000 fake documents in a month,” the firm added.

In January, the Commodity Futures Trading Commission (CFTC) issued a consumer warning about AI-fueled scams. The agency has warned about schemes that offer huge profits through crypto arbitrage algorithms and other AI-powered technologies.

The CFTC highlights that scammers often make false promises of quick profits, taking advantage of the public's fascination with AI. One famous scam resulted in the loss of 30,000 Bitcoin (BTC), worth around $1.7 billion at the time.

Read more: AI in Finance: Top 8 Artificial Intelligence Use Cases for 2024

Indeed, the intersection of AI and crypto presents both enormous opportunities and significant challenges. While AI can increase security and efficiency in crypto, its potential for abuse underscores the need for a well-planned and informed response. By understanding these new trends, stakeholders can better protect the crypto ecosystem from the evolution of criminal tactics.