2024 Brings Heightened Alert for Advanced AI-Driven Crypto Scams, Security Firms Advise

Blockchain security experts are raising alarms about the potential rise in advanced AI-driven crypto scams in 2024. Despite a decline in scam and hack-related losses from $4 billion in 2022 to $1.7 billion in 2023, the complexity of these scams is increasing, as noted by industry specialists in a recent Cointelegraph discussion.

Jesse Leclere, an analyst at on-chain security firm CertiK, pointed out the enhanced sophistication of phishing attacks, which could target not just individual users but also corporate systems. An instance of such a complex attack was the Ledger Connect exploit on December 14.

Leclere predicts that generative AI will play a significant role in crafting more convincing phishing scams by automating operations and generating realistic fake communications specifically aimed at crypto users.

Another area of concern for 2024 is cross-chain bridges. Leclere anticipates these will be key targets for attackers, exploiting vulnerabilities created by interactions between different chains. This risk is underscored by the $126 million Multichain hack in July 2023.

Jenny Peng, a research analyst from 0xScope, warns of AI’s potential to create realistic “deep fakes,” posing a new level of threat to crypto users. Peng particularly mentions the Bitcoin-based BRC-20 ecosystem as a potential hotspot for hacker attention in 2024, given its current security development lag. The early 2023 double-spend exploit targeting the BRC-20 UniSat wallet is cited as a prime example of this vulnerability.

Phil Larratt, Director of Investigations at Chainalysis, added to the caution, predicting that illicit actors will employ more sophisticated tactics and techniques. He anticipates an increased use of privacy coins, bridges, mixers, and obfuscation tools by scammers. Larratt emphasizes the importance of intensive law enforcement investigations, advanced fraud protection programs, and continued public-private partnerships to combat these evolving threats.