The emergence of artificial intelligence (AI)-driven crypto crimes represents a significant escalation in cyber threats, according to Elliptic's 2024 report. The report exposes how advanced technologies are being leveraged for a wide range of illicit activities, including deepfake scams, state-sponsored cyberattacks, and other sophisticated schemes, signaling that these threats are just beginning.

Elliptic's report sheds light on a disturbing trend where AI is exploited for unethical purposes, with an advertisement for an "unethical" generative pre-trained transformer (GPT) surfacing on the dark web. This advertisement ominously states, "AI has two faces, just like humans," hinting at the dual nature of AI's capabilities.

One example highlighted in the report is the WormGPT advertisement, which invites users to embrace the "dark symphony of code" and navigate the shadows of cyberspace to "conquer new frontiers." This reflects the increasing sophistication of AI-driven cybercrime and the evolving tactics used by malicious actors.

Deepfake technology, in particular, has become a prominent tool in the arsenal of crypto scammers. Elliptic's report reveals instances of deepfake videos featuring well-known figures such as Elon Musk and former Singaporean Prime Minister Lee Hsien Loong being used to promote fraudulent investment schemes. These videos are designed to deceive unsuspecting victims and lure them into sending funds to scam crypto addresses.

Anne Neuberger, the U.S. Deputy National Security Advisor for Cyber and Emerging Technologies, has also raised concerns about the misuse of AI by criminal actors. Neuberger warns that North Korean and other nation-state actors, as well as criminal groups, are employing AI to accelerate the creation of malicious software and identify vulnerable systems.

Furthermore, Elliptic's report highlights discussions on dark web forums about the misuse of large language models (LLMs) for nefarious purposes, including reverse-engineering crypto wallet seed phrases and bypassing authentication for various services. This underscores the growing sophistication of AI-driven cybercrime and its potential impact on cybersecurity.

Despite the increasing use of AI in criminal activities, the report emphasizes that such activities are not without consequences. The recent arrest of a dark web market owner in New York, who was charged with running a $100 million narcotics marketplace, serves as a stark reminder of the risks involved in engaging in illicit activities facilitated by AI and cryptocurrencies.