Crypto Fraud Surges in the US, Driven by Fake Investment Schemes, AI Tools

Cryptocurrency-related fraud continues to surge in the US, fueled by the rapid proliferation of fake investment schemes, extortion attempts, and increasingly sophisticated scams involving crypto ATMs and QR codes.

Newly released data from the Internet Crime Complaint Center (IC3) of the US Federal Bureau of Investigation (FBI) show that 2024 was a record-breaking year for crypto crime. The agency received 149,686 complaints linked to crypto-related fraud, representing a staggering 115% year-over-year (YoY) increase. These cases totaled an unprecedented US$9.3 billion in losses, up 66% YoY.

Investment scams dominate crypto crime

Investment fraud remained the most lucrative category, accounting for US$5.8 billion in losses, or 62% of all crypto-related fraud losses in 2024. The IC3 logged 41,557 investment-related crypto complaints, representing 27.8% of total crypto fraud reports. These figures represent a 47% YoY increase in losses, and 29% YoY increase in complaints, underscoring the growing success of these scams in deceiving victims.

Crypto investment fraud, also referred to as “pig butchering”, is one of the most prevalent and damaging fraud schemes today. In these schemes, scammers lure victims to deposit more and more money into sham financial investments using cryptocurrencies. Ultimately, the funds end up getting stolen, with no legitimate investment behind the scenes. Globally, these scams have cost victims around the world an estimated US$75 billion in just the last four years.

But beyond the financial toll, pig butchering also has a human cost. Many perpetrators are actually human trafficking victims forced to run the scheme by large crime syndicates in Southeast Asia.

The United Nations (UN) estimates that around 100,000 people from more than 50 countries are currently trapped in scam compounds across the region, often under threat of violence or torture. These victims are forced to conduct online scams, including crypto fraud, romance schemes, and fake investment schemes, targeting victims around the world.

Crime types with cryptocurrency nexus (losses), Source: 2024 IC3 Annual Report, Internet Crime Complaint Center (IC3)

Extortion schemes become widespread

In 2024, extortion schemes were the most prevalent type of crypto fraud in the US, making up 31.8% of all crypto-related complaints with 47,557 cases. However, they resulted in relatively low financial damage, totaling just US$96 million in losses, or only 1% of all crypto fraud losses.

While the number of cases increased by 59% YoY, losses rose by only 9% YoY, suggesting that while extortion attempts are becoming more frequent, their financial impact is shrinking, reflecting growing public awareness, and increased law enforcement actions.

Crime types with cryptocurrency nexus (complaint count), Source: 2024 IC3 Annual Report, Internet Crime Complaint Center (IC3)

The rise of extortion schemes coincides with the proliferation of artificial intelligence (AI). Cybercriminals are increasingly leveraging generative AI tools to orchestrate more convincing financial fraud, social engineering, and identity-based scams at scale, leveraging AI-generated text, images, audio, and video to create fake personas, clone voices and faces for impersonation and extortion, and forge documents and identity photos.

The FBI has reported an uptick in the number of cases involving the use of altered or fabricated images to blackmail victims. In these scenarios, malicious actors would typically demand payments with threats to share these images or videos with family members or social media friends if funds were not received.

Globally, ransomware attackers received approximately US$813.55 million in crypto payments from victims, according to blockchain data platform Chainalysis. The figure represents a 35% decrease from 2023’s record-setting year of US$1.25 billion, and the first year of decline in ransomware revenues since 2022.

Chainalysis attributes this decline to stronger law enforcement pressure, international cooperation, and victim resistance to paying ransoms.

Annual ransomware payment totals (2020-2024), Source: Chainalysis, Feb 2025

Leveraging crypto ATMs and QR codes

The FBI has also reported a rise in fraudulent schemes leveraging cryptocurrency ATMs and QR codes to facilitate payments. In these schemes, scammers are directing victims to use physical cryptocurrency ATMs and digital QR codes to carry out payment transactions, often under false pretenses.

These scams span various tactics, including online impersonation, where a scammer would falsely identify as a familiar entity; romance schemes, where perpetrators establish an online relationship and create emotional dependence; or lottery schemes, where scammers falsely convince a victim that they have won an award, consequently demanding the victim to pay lottery fees.

In 2024, the IC3 received 10,956 complaints involving crypto ATMs and kiosks, totaling US$246.7 million in losses. This marks a 99% increase in the number of cases from 2023, along with a 31% YoY increase in reported losses.

Extortion scams accounted for the largest share of complaints involving crypto ATMs and QR codes, with 4,189 cases, followed by tech support scams (3,037), government impersonation (1,786), and investment (606). Tech support scams were the most profitable, amassing US$107 million, followed by government impersonation (US$44.6 million), and investments (US$38 million).