Crypto scams likely hit a new record in 2024, driven by ‘pig butchering’ and AI, says Chainalysis 

Chainalysis said that crypto wallets linked to scams received $9.9 billion in cryptocurrency in 2024, according to its initial estimatesBoonchai Wedmakawand | Moment | Getty ImagesCrypto fraud revenue is estimated to have hit record levels last year amid a surge in so-called romance scams as cybercriminals leverage artificial intelligence and become more organized, blockchain research firm Chainalysis warns.In a report released Thursday, the firm said that crypto wallets linked to scams received $9.9 billion in cryptocurrency in 2024, according to its initial estimates. It predicts 2024’s figure to grow to a record of $12.4 billion as Chainalysis identifies more scam wallets. Chainalysis added that its yearly estimates of scam activity have risen by an average of 24% between annual reporting periods since 2020. According to its 2024 report, a leading reason for the uptick in scam revenue was an increase in the prevalence of romance scams, commonly known as “pig butchering.”Pig butchering is a type of investing or romance scam in which a fraudster builds relationships with victims via social media or dating apps, intending to con them out of money through a sham investment opportunity. The name “pig butchering” comes from the idea that scammers must first “fatten up” the victims with flattery and fabricated bonds before “butchering,” or stealing their money.More victims sent to slaughter In 2024, pig butchering revenue grew nearly 40% year over year, with the number of deposits to pig butchering scams growing nearly 210% over the same period, according to Chainalysis. The firm said that those differing growth rates indicated an expansion of the victim pool, prioritizing more victims in exchange for smaller payments. While pig butchering scams predominantly originate from large scam compounds in Southeast Asia, there are signs that such scam centers have begun to become more geographically dispersed, the report stated. Last December, Nigeria’s anti-graft agency announced the arrest of 792 people in a raid on a building, where the suspects were believed to be running romance scams that targeted people mostly from Europe and the Americas, according to Reuters.Romance scams often rely on human trafficking victims to carry out fraud. An investigation by ProPublica in 2022 outlined how Chinese criminal syndicates were trafficking victims to centers in Cambodia, Laos and Myanmar, forcing them to perform cyberfraud under threat of violence. While those scam compounds are often known for running pig butchering scams, they also act as havens for other types of frauds that can be carried out via the internet, according to Eric Heintz, a global analyst at International Justice Mission, who is cited in the Chainalysis report. “It’s not uncommon to have multiple criminal groups operating within the same compound focusing on different scams,” he added. Scam ecosystem ‘professionalizes’The dynamic of multiple criminal groups operating within a compound