News

AI Supercharges Crypto Scams as Losses Soar to $14 Billion

by CBIA Team

Updated January 14, 2026

Feature image — CBIA thanks Tima Miroshnichenko for the photo

Cryptocurrency scams extracted at least $14 billion from victims in 2025, representing a dramatic surge from the previous year as fraudsters increasingly deploy artificial intelligence and sophisticated phishing infrastructure to maximise their criminal profits. Industry analysis shows the average payment to scammers more than tripled to $2,764, while impersonation schemes exploded by 1,400% year-over-year, demonstrating how technological innovation is reshaping the landscape of digital fraud.

Background and Context

The scale of cryptocurrency fraud has accelerated dramatically since 2024, when estimated losses reached approximately $12 billion. Historical trends indicate annual growth averaging 24% between reporting periods, suggesting 2025 figures could ultimately exceed $17 billion as more illicit wallet addresses are identified. The financial impact reflects not just increased victim numbers but enhanced operational efficiency achieved through new technologies and specialised fraud-as-a-service platforms that lower barriers to criminal entry.

While high-yield investment programs and pig butchering schemes remain dominant by volume, traditional scam categorisations have blurred as fraudsters combine multiple tactics—impersonation, social engineering, technical exploitation—into unified campaigns. This convergence approach allows criminals to target victims more effectively while maximising revenue per operation through increasingly sophisticated psychological manipulation.

Key Figures and Entities

Among the most active criminal groups is the China-based cybercriminal network known as "Darcula" or the "Smishing Triad," which orchestrated massive phishing campaigns impersonating government agencies like E-ZPass toll services. According to Google's lawsuit filed in November 2025, the group used Lighthouse phishing-as-a-service tools to distribute fraudulent SMS messages at scale, reaching hundreds of thousands of potential victims daily.

In the private sector, Ronald Spektor, a 23-year-old Brooklyn resident, was indicted in December 2025 for leading a sophisticated Coinbase impersonation scheme that defrauded victims of nearly $16 million. The operation exploited data compromised through an insider breach involving a former Coinbase customer service agent who allegedly accepted $250,000 in bribes, compromising approximately 70,000 customer accounts and enabling highly credible impersonation attacks.

Law enforcement actions have targeted high-level operators including Zhimin Qian (also known as Yadi Zhang), who received an 11-year and eight-month prison sentence in the UK for laundering over 61,000 Bitcoin—valued at approximately £5 billion—after orchestrating a multibillion-pound investment fraud in China. Meanwhile, Prince Group chairman Chen Zhi faced charges for overseeing Cambodian forced-labor scam compounds that powered large-scale cryptocurrency fraud worldwide.

Legal and Financial Mechanisms

The criminal ecosystem relies on increasingly modular, service-based structures where different actors specialise in distinct elements of the fraud chain—from phishing software development and targeted data provision to mass messaging and monetisation of stolen information. This industrial approach, exemplified by the Lighthouse Enterprise, allows technically unsophisticated criminals to execute sophisticated campaigns by purchasing turnkey solutions priced as low as $20 for version updates.

Blockchain analysis reveals distinctive laundering patterns that differ by scam type. While most cryptocurrency scams continue to rely heavily on centralised exchanges, impersonation schemes demonstrate evolving DeFi laundering tactics with pronounced waves shifting between smart contracts, bridge protocols, and decentralised exchanges throughout 2025. This adaptability reflects criminal networks' rapid response to enforcement pressure and changing technical landscapes.

Artificial intelligence has become a critical force multiplier in scam operations. Analysis of on-chain transactions linked to Chinese AI vendors reveals that AI-enabled scams extract 4.5 times more revenue ($3.2 million versus $719,000) and generate nine times more daily transactions than their conventional counterparts. According to a July 2025 J.P. Morgan report, scammers increasingly leverage deepfake technology and AI-generated content to create convincing impersonations in romance and investment schemes.

International Implications and Policy Response

The transnational nature of these operations presents significant jurisdictional challenges, as demonstrated when Chen Zhi was arrested in Cambodia but extradited to China rather than the United States, where he also faces indictment. Despite these obstacles, 2025 saw unprecedented law enforcement coordination resulting in two of the largest crypto-related enforcement actions ever recorded, including the UK's record-setting Bitcoin seizure and the US Department of Justice's disruption of the Prince Group network.

Authorities have increasingly adopted systematic dismantling approaches targeting the economic backbone of fraud operations rather than individual scammers. The US Treasury's Office of Foreign Assets Control designated 146 targets within the Prince Group Transnational Criminal Organisation, while the FBI reported that Americans aged 60 and older lost $2.8 billion to crypto-related scams in 2024 alone. These coordinated actions reflect growing international recognition of cryptocurrency fraud as a systemic threat requiring multilateral response.

Regional analysis continues to show persistent connections between cryptocurrency scams and operations based in East and Southeast Asia, with pig butchering activity notably decreasing during the Chinese New Year holiday—demonstrating the region's centrality to the scam ecosystem. The shutdown of the Huione Guarantee platform following FinCEN's 311 designation has only led to expansion of similar operations across the region, highlighting the need for sustained international pressure and capacity building in low-capacity jurisdictions.