AI impersonation reshapes crypto fraud

New data from Chainalysis highlights how evolving crypto scam trends are increasingly powered by impersonation tactics and artificial intelligence across global markets.

$17 billion in crypto lost to scams and frauds in 2025

In its latest 2026 Crypto Crime Report, analytics firm Chainalysis revealed that $17 billion in cryptocurrency was lost to scams and frauds in 2025. The figure underscores how digital asset crime is expanding beyond traditional hacks. Moreover, it shows criminals are rapidly adapting their methods to exploit human psychology rather than only technical vulnerabilities.

The report emphasizes that impersonation schemes and AI-generated scams are now overtaking conventional cyber-attacks as the primary engines of crypto theft. While protocol hacks and exchange breaches remain a serious problem, the balance of risk is moving toward more personalized fraud. That shift is reshaping where the largest crypto scam losses are now coming from in the sector.

Impersonation scam growth and AI-enabled profitability

According to Chainalysis, impersonation scams recorded a staggering 1,400% year-over-year increase. At the same time, average payment sizes climbed sharply as criminals moved away from broad “spray-and-pray” tactics. Instead, they are targeting fewer victims but extracting significantly larger sums when they succeed, often by posing as trusted entities.

The report also finds that AI-enabled scams are 4.5 times more profitable than traditional variants. Deepfakes, automated chat tools and synthetic content make it easier to fabricate convincing “support agents,” “government notices” and “trusted insiders” at scale. However, this industrialization of fraud depends heavily on social engineering, not sophisticated code exploits, to separate users from their funds.

Within this broader picture of crypto scam trends, impersonation is emerging as a central pillar of digital asset crime. Criminals increasingly combine realistic visuals, cloned identities and persuasive scripts to build narratives that feel authentic. That said, these operations often rely on urgency, secrecy and emotional pressure rather than technical force.

High-profile UK bitcoin investment scam example

The report highlights that once-rare cases are fast becoming mainstream. In one notable incident, a man in the U.K. lost nearly $2.5 million in 2025 to a bitcoin investment scam described by police as “a disturbing new trend.” Scammers exploited “fear” and “panic,” crafting complex social engineering schemes designed to deceive even careful holders, according to North Wales police, which spoke to the BBC.

Furthermore, the North Wales Cyber Unit reported in April 2024 that, between 2020 and the end of 2023, nearly 100,000 people in the U.K. fell victim to investment scams. These losses totaled £2.6 billion, approximately $3.5 million, or about £13 million (roughly $17.5 million) every week. Officials stressed that these are only reported incidents, so the actual figure is likely far higher.

Those numbers suggest the U.K. case is no longer an edge scenario, but part of a broader surge in fraud targeting retail investors and traders. Moreover, the pattern mirrors what investigators are observing globally, as criminals mix traditional confidence tricks with new digital distribution channels.

From technical exploits to human-focused deception

Chainalysis argues that the evolution of crypto crime matters because it changes the core risk model for users and platforms. While hacks continue to pose a persistent threat, with nearly $2.2 billion reportedly stolen in 2024, the largest share of losses is increasingly tied to social engineering. In many cases, infrastructure may function correctly even as users are persuaded to authorize damaging transactions.

One exchange executive quoted in the report warned that impersonation fraud “is increasing and becoming more sophisticated” across the industry. He urged users never to share sensitive data, even if they are convinced they are speaking with legitimate support staff. Moreover, he stressed that people should never transfer their crypto to anyone who reaches out unexpectedly, noting that urgent or secretive messages are usually a clear red flag.

The same executive said he has personally been impersonated multiple times by scammers. Fraudsters created fake profiles under his name, contacted industry participants and requested money while pretending to represent the exchange. That said, these attacks rely far more on urgency and trust than on advanced technology, making education and skepticism key defensive tools.

Why AI and impersonation redefine crypto risk

Data from Chainalysis suggests that this shift toward deception is now a defining feature of digital asset crime. Rather than simply exploiting bugs in smart contracts or exchange systems, criminals increasingly stage interactions that feel authentic enough to bypass user skepticism. Furthermore, AI tools lower the cost of producing convincing materials, from fake voices to realistic documents and chat conversations.

As a result, even when wallets, protocols and exchanges are properly secured, users may still be tricked into surrendering control of their assets. The boundary between cybersecurity and behavioral manipulation is blurring, forcing market participants to rethink how they train customers and design user interfaces. However, improved awareness, clearer communication from service providers and stronger verification steps can help reduce the effectiveness of such schemes.

In summary, the latest Chainalysis findings indicate that crypto crime is evolving from technical exploitation toward large-scale, AI-assisted impersonation and fraud. With billions of dollars at stake in 2024 and 2025, the industry faces an urgent need to reinforce user education and verification practices. Ultimately, defending against these scams may depend less on code audits and more on strengthening human judgment.