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AI’s Impact on Crypto Crime
Artificial intelligence (AI) is expected to play a significant role in shaping the landscape of crypto-based crime in the near future. According to insights from blockchain intelligence platform Chainalysis, the adoption of AI by crypto criminals poses new challenges and risks.
Crypto Criminals Leveraging AI
Chainalysis Cybercrimes Research Lead Eric Jardine highlighted the emerging trends in illicit blockchain activities in 2023 during a recent webinar. He discussed the potential tactics that criminals may employ in the future, with a particular focus on the use of AI technologies.
- AI models for code audits could enhance the security of decentralized finance (DeFi) platforms.
- Conversely, these models could also be utilized by malicious actors to identify vulnerabilities in smart contracts.
Challenges in the DeFi Sector
The DeFi sector remains a prime target for cryptocurrency theft, with hackers exploiting code vulnerabilities, stealing private keys, and manipulating prices to carry out attacks. While formal audits are common in the industry, their effectiveness in preventing hacks is not guaranteed.
The total value of stolen DeFi funds decreased from $3.1 billion in 2022 to $1.1 billion in 2023, accompanied by a decline in the number of incidents.
AI in Romance Scams
Aside from impacting DeFi, AI technologies also present risks in the realm of romance scams. These scams, often referred to as “pig butchering” scams, involve building fake relationships to exploit victims financially.
According to Jardine, AI-powered large language models could be used by scammers to create convincing personas and manipulate victims effectively.
Despite a reduction in total scam volume, romance scammers in the crypto space saw an increase in revenue in the past year. The average payment in romance scams amounts to $4,593, with victims often making multiple payments.
In 2023, illicit activities accounted for only 0.34% of all crypto transactions, indicating a decline in malicious activities within the blockchain ecosystem.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
