Artificial intelligence (AI) is increasingly being used for crime in the cryptocurrency ecosystem. The report states that criminals are increasingly using generative AI to create deepfakes and other fraudulent materials to carry out crypto scams.

In addition, AI-related fraudulent tokens, investment platforms, Ponzi schemes, and fake trading bots are also significantly increasing. Elliptic notes that scammers often use popular technologies and buzzwords to create tokens or investment schemes that ultimately lead to exit scams.

One notable incident involves a fake AI trading bot scam called iEarn in 2023, which resulted in about $6 million in losses. The surge in AI trading bots prompted the US CFTC to issue a warning in January.

The report also notes that in addition to creating tokens, fraudsters are using AI as a means of hype on fraudulent investment platforms. In particular, scammers are attempting to use the potential of AI to enhance trading or arbitrage capabilities. Additionally, AI technology is being used to facilitate large-scale crypto scams and false information campaigns.