AI-Powered Scams Surged 500% in 2025
The use of artificial intelligence in cryptocurrency scams increased fivefold in 2025, according to a new crime report from TRM Labs. Fraudsters are leveraging large language models (LLMs), AI-generated images, and deepfake videos to industrialize their operations. These technologies enable scammers to cross language barriers, automate outreach, and create highly convincing personas at a fraction of the traditional cost. In March 2025, for instance, several crypto founders reported thwarting hacking attempts from alleged North Korean actors who used deepfakes in fake Zoom calls to try and steal sensitive data. This technological shift makes scams more deceptive and harder to detect, even for vigilant investors.
Fraud Operations Industrialize, Moving $35 Billion
Scammers directed $35 billion in cryptocurrency to illicit addresses in 2025, a slight decline from the $38 billion recorded in the prior year. The high volume reflects a new level of operational sophistication, where distinct fraud tactics are now being combined into multi-stage attacks. A typical victim journey might begin with a romance scam to build trust, pivot to a fraudulent investment opportunity, and conclude with an advance-fee scam demanding payment for non-existent taxes. This layered approach is supported by a growing ecosystem of illicit service providers offering "AI-as-a-service" tools and phishing kits, allowing criminals to scale campaigns globally with business-like efficiency.
Although social engineering remains a key component of fraud campaigns, it is now reinforced by technical and organizational innovations that make fraud more scalable and harder to detect.
Illicit Volume Jumps 146% Even as Market Share Dips
While direct scams accounted for $35 billion, total illicit activity across the crypto ecosystem tells a broader story. TRM Labs estimates that wallets tied to illicit activities, including sanctioned entities, received approximately $158 billion in 2025. This marks a 146% increase from the $64 billion observed in 2024, an expansion largely attributed to increased sanctions against nations like Russia and advances in blockchain monitoring that uncovered more activity. Despite the significant rise in absolute dollar terms, the proportion of illicit transactions relative to total crypto volume fell slightly, moving from 1.3% in 2024 to 1.2% in 2025.
