Cryptocurrency Threat: How Counterfeits and AI Have Become the Main Weapons of Scammers

A new threat has emerged over the cryptocurrency industry. According to the annual report by the analytics firm Chainalysis, published in early January, fraud and scams caused losses of $17 billion in 2025. But the most alarming aspect is that criminals have radically changed their attack methods, abandoning complex technical exploits in favor of human trust-based techniques and artificial intelligence.

The threat is no longer solely about hacking smart contracts or compromising exchange systems. Instead, crypto criminal activity has shifted to social engineering, deepfakes, and automated imitation schemes, which have proven to be much more effective than traditional cyberattacks.

Scale of losses and change in attack tactics

The scale of cryptocurrency fraud in 2025 exceeded all expectations: $17 billion is not just a figure, it’s a warning sign of a serious threat to all market participants. Even more concerning, criminals have completely reoriented their methods. While previously the main danger was considered to be cyberattacks on infrastructure, now the primary threat comes from low-tech but highly effective social manipulation schemes.

According to Chainalysis, identity fraud increased by 1400% in one year. This explosive growth was accompanied by a shift in criminals’ approach: they moved from mass mailings to targeted, high-profit attacks on wealthy investors. The average loss per victim has significantly increased, indicating a more sophisticated and calculating approach by malicious actors.

Artificial intelligence as a tool for profit

The use of artificial intelligence in cryptocurrency scams has opened new horizons for criminals. According to Chainalysis, AI-powered scams generate 4.5 times more income than traditional schemes. The technology allows for automating the creation of fake profiles that imitate support staff, government officials, or trusted insiders of the industry.

Deepfakes and generative algorithms have greatly simplified the scaling of criminal activities. Criminals can now create convincing video and audio content that deceives even cautious victims. This automation threat turns every user of the cryptocurrency ecosystem into a potential target.

Real cases and increasing risk

In the UK, a case has been documented where a man lost nearly $2.5 million in Bitcoin scams in 2025. The local police of North Wales called this phenomenon a “disturbing new trend,” where criminals use fear and panic, building complex social engineering schemes capable of bypassing even attentive crypto holders.

Historical data highlights the scale of the problem: between 2020 and the end of 2023, nearly 100,000 people in the UK fell victim to investment fraud totaling £2.6 billion (approximately $3.5 billion). This amounted to about $17.5 million per week. Law enforcement emphasizes that these figures only cover registered cases, and the actual number of victims is likely much higher.

Voices from the industry: warnings from practitioners

Lior Izik, co-founder and COO of the cryptocurrency exchange XBO, confirms that the threat from identity fraud is rapidly growing. He has personally encountered situations where scammers used his name and created fake profiles to contact industry representatives with requests for money transfers, impersonating XBO employees.

Izik warns cryptocurrency users: never share confidential information even with someone claiming to be support staff. “If a message seems urgent or contains a confidentiality request, it’s almost always a scam,” the expert warns. The main strategy of criminals is based on creating a false sense of urgency and trust, rather than technical vulnerabilities.

Paradigm shift: from hacks to deception

The evolution of the cryptocurrency threat is fundamentally important. Despite the fact that hacks remain a constant risk — around $2.2 billion was stolen through technical exploits in 2024 — fraudulent schemes are increasingly relying on something more difficult to eliminate than code vulnerabilities: human trust.

This transformation means that the security of wallets and exchange systems is no longer a sufficient shield. The threat now has a more personalized nature, requiring each participant to have a high level of critical thinking and awareness of social engineering methods.

The cryptocurrency industry must recognize that the new wave of scams poses an existential threat not so much to the technological infrastructure as to the trust of participants in the ecosystem as a whole. Combating this threat requires a comprehensive approach, including user education, multi-layered verification, and continuous improvement of social engineering detection methods.