AI speeds up fraud and scams in cryptocurrency websites and influencer marketing.

According to an Elliptic report, AI technology is being used by scammers to accelerate and amplify their recurring cryptocurrency scams, as well as to explore new avenues for illicit activities. Influencers are leveraging their platforms to encourage their followers to invest in cryptocurrency, driving up the prices. They subsequently sell their holdings, causing the prices to plummet and profiting at the expense of their followers. These influencers also spread exaggerated or false claims, inciting fear and prompting panic selling in the market, allowing them to purchase cryptocurrencies at lower prices.

Additionally, they create scam investments, airdrops, or giveaway sites that are widely promoted on social media and messaging apps, ultimately leading to a “rug pull,” where the scammers vanish with the victims’ funds, leaving them with nothing. The entire process is cyclical; after executing the “rug pull,” scammers often restart the cycle with a new token, site, and marketing strategies. Creating these scam documents, from social media accounts to websites and user interfaces, is time-consuming, resource-intensive, and costly. Utilizing AI not only saves time but also enhances the sophistication of the scams, making them more difficult to detect.

Scammers typically employ social media bots to disseminate fake marketing and messages on a large scale. Instances such as Jessica’s disappearance after receiving a final payment and the NovaDrainer crypto affiliate platform based in Canada and the UK, which openly markets its use for phishing and draining victims’ crypto, highlight the extent of these scams. Although the scams are not currently automated through AI, the cryptocurrency industry needs to invest in advanced security measures and collaborate with AI developers to create technologies capable of detecting and countering these scams. Additionally, raising awareness among cryptocurrency users about the potential risks and educating them on identifying and avoiding scams is crucial.

The industry must prioritize these efforts to protect users and maintain trust in the cryptocurrency market.

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