Beware, AI crypto scams are on the rise.

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AI has arrived, and it's already changing things in the crypto world. Coders use it to code, researchers use it for research and unfortunately, scammers use it to scam. That's the finding of a new report from blockchain analytics firm Elliptic on the emerging threats of AI in perpetuating the criminal use of crypto.

This is an excerpt from the Node Newsletter, a daily roundup of the most important crypto news from CoinDesk and beyond. You can subscribe to get full. Newsletter here.

Note: The views expressed in this column are those of the author and not necessarily those of CoinDesk, Inc. or reflect the views of its owners and affiliates.

“The rise of artificial intelligence has shown great potential for innovation, not least within crypto. However, as with any emerging technology, there are dangerous actors who seek to exploit new developments for illicit purposes. remains at risk,” the report reads.

Although the risk is still low, the firm's researchers have identified five “typologies” where AI is already being deployed in nefarious ways. These include creating and spreading deepfakes to create more convincing scams, creating AI-scam tokens to capitalize on hype, using large language models to devise hacks, spreading disinformation and facilitating identity theft. This includes creating more persuasive phishing websites/prompts.

Awareness of these new (or, frankly, old, but now supercharged) scams means consumers can stay ahead of the curve. This means that crypto users should be more aware of the most common types of crypto-related scams. CoinDesk has a good report on this front here that covers all the basics such as social media scams, Ponzi schemes, rig pulls and “romance schemes” (now often called “pig butchering”).

“The reason there's no easy way to tackle this problem is because it's really a multifaceted problem, each with its own variables and solutions,” wrote Pete Pichel, author of the best media co-pilot substack, in a recent article on DeepFax. AI and crypto

Such instances are only likely to increase. Crypto was the “primary target sector” for nearly 90 percent of deepfake scams detected in 2023, verification company Simsub claims. While it's unclear how effective these scams were, the FBI's Online Crime Report found that crypto investment losses in the U.S. rose 53 percent to $3.9 million. billion last year.

However, it's worth noting that many times examples of fraud in the crypto industry are only incidentally related to crypto, as it's just a topic that attracts a lot of attention and is often complicated for those involved. There are those who are not included in the culture.

As CFTC Commissioner Summer Mercinger told CoinDesk: “I think it's a little bit unfair because a lot of these cases are just run of the mill fraud. Someone is stealing someone else's money, someone claiming to buy crypto.” is doing, but not actually buying crypto so we've seen the game with whatever is the hot topic at the moment.

If there's any consolation, it's that AI-generated images, video and text are still relatively easy to see if you know what to look for. Crypto users should be especially vigilant, considering how common it is for even high-profile figures to be scammed through social engineering schemes or malicious scripts.

MetaMask builder Taylor Monahan has a helpful tip here: Always know you're a potential target, and actually verify that what you're clicking on is what it's intended to be.

Crypto is already a low-trust environment, simply given the nature of the technology. And it could be even less.

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