Artificial Intelligence (AI) is increasingly being leveraged by criminals to commit crimes in the crypto asset ecosystem, according to a recent report from Elliptic. The report highlights the growing trend of AI-powered crypto scams, which have resulted in significant financial losses for unsuspecting individuals.

One of the most concerning developments is the use of Generative AI to create deepfakes and other deceptive materials to promote crypto scams. These deepfakes, which are often posted on social media platforms, lure individuals into investing in scam projects that can result in funds theft. Notable examples include deepfakes of Elon Musk, former Singaporean Prime Minister Lee Hsien Loong, and both the 7th and 8th Presidents of Taiwan Tsai Ingwen and Lai Ching-te.

Furthermore, there has been a significant rise in AI-related scam tokens, investment platforms, Ponzi schemes, and fake trading bots. Scammers often use trendy technology and buzzwords to create tokens or investment schemes, culminating in exit scams. For instance, a fake AI trading bot scam called iEarn in 2023 resulted in approximately $6 million in losses.

Criminals are also using large language model (LLM) AI programs to identify vulnerabilities in project codes. This finding aligns with a recent report by Microsoft and OpenAI, which indicates that cybercriminals increasingly use LLMs to enhance their operations. Moreover, AI technology is being adopted to facilitate large-scale crypto scams and disinformation campaigns.

Despite these growing threats, Elliptic believes AI technology is still in its infancy and offers numerous benefits. Mitigating these threats requires the collaborative efforts of all stakeholders, including law enforcement agencies, crypto compliance professionals, and AI users. By working together, we can ensure that AI technology is used for the betterment of society, rather than for malicious purposes.