A new report by Elliptic reveals an alarming trend in the cryptocurrency ecosystem, where criminals are increasingly using artificial intelligence (AI) to commit crimes. The report highlights that scammers are leveraging generative AI to create deep fakes and other deceptive materials to carry out cryptocurrency scams, resulting in significant financial losses for unsuspecting victims.

The report notes that there has been a significant rise in AI-related scam tokens, investment platforms, Ponzi schemes, and fake trading bots. Scammers often use popular technology and jargon to create tokens or investment plans, which ultimately lead to exit scams. A notable incident involved a fake AI trading bot named iEarn in 2023, which resulted in a loss of approximately $6 million. The surge in AI trading bots prompted a warning from the U.S. Commodity Futures Trading Commission (CFTC) in January.

The report further adds that scammers are using AI as a means of hype on fraudulent investment platforms. Specifically, scammers attempt to leverage the potential of AI to enhance trading or arbitrage capabilities, making their scams appear more legitimate and attractive to potential victims. Moreover, AI technology is being used to facilitate large-scale cryptocurrency scams and disinformation campaigns, making it increasingly difficult for authorities to track and prosecute these crimes.

The increasing use of AI in cryptocurrency scams highlights the need for greater vigilance and awareness among investors and regulators. It is essential to stay informed about the latest scams and tactics used by criminals, and to be cautious when investing in cryptocurrency-related projects or platforms.

In conclusion, the report by Elliptic highlights the growing threat of AI-powered cryptocurrency scams, which can result in significant financial losses for unsuspecting victims. It is essential to stay informed and vigilant to avoid falling prey to these scams, and for regulators to take proactive measures to prevent and prosecute these crimes.