Be Aware: Cryptocurrency Fraudsters Are Expected to Utilize More Persuasive AI Scams in 2024

• Crypto thieves will deploy more convincing AI scams in 2024, firms warn

Crypto investors must remain vigilant against increasingly sophisticated phishing scams and a variety of smart contract vulnerabilities in the upcoming year, as indicated by blockchain security firms.

Among the most significant threats anticipated for crypto projects and investors in 2024 are AI-driven phishing scams, BRC-20 exploits, and emerging smart contract vulnerabilities, according to blockchain security experts.

Despite the $1.7 billion in losses related to scams and hacks in 2023 representing a notable improvement over the $4 billion lost in 2022, Jesse Leclere, a blockchain analyst at CertiK, cautioned that scams are evolving in complexity, and users should remain highly alert for well-executed exploits.

“Phishing, becoming more sophisticated, will likely target not just individual users but also corporate systems […] employing social engineering tactics tailored to the crypto environment,” Leclere noted, citing the Dec. 14 Ledger Connect exploit as a prime example of an advanced attack.

One of the critical factors contributing to the increasing malevolence of phishing scams is the application of generative AI, he stated, enabling hackers to automate processes and produce convincing fake calls, videos, and messages to trap potential victims.

As predicted, Generative AI scams are now here. These will be dramatically better in 12-24 months and hard for anyone to distinguish between reality and the AI fiction https://t.co/u7uaIEUodt

— Charles Hoskinson (@IOHK_Charles) December 15, 2023

Jenny Peng, a research analyst at 0xScope, cautioned that AI could play a crucial role in creating increasingly realistic “deep fakes” to deceive crypto users.

Peng also mentioned that hackers are likely to pay “extra attention” to the emerging BRC-20 ecosystem next year due to a relative lack of security advancements.

See Also: Scammers Stole $3M Crypto On Christmas Day Using MS Drainer

“The BRC-20 UniSat wallet launched in early 2023 and was quickly targeted by a double-spend exploit. This incident illustrates that the BRC-20 ecosystem, being relatively new, will need to rapidly enhance its infrastructure to match the security robustness of Ethereum,” she added.

Cross-chain bridges, already a longstanding challenge for the industry, will continue to pose risks in 2024, according to Leclere.

#PeckShieldAlert @MultichainOrg has been drained of ~$126M worth of cryptos, ranking it at #6 on our cross-chain bridge exploit leaderboard.
Additionally, #PolyNetwork, which was exploited for ～$25M, stands at #8.

As of today, ~$1.92B associated with cross-chain bridges has… pic.twitter.com/UvJF8BwQfs

— PeckShieldAlert (@PeckShieldAlert) July 7, 2023

“As the industry increasingly embraces cross-chain solutions for enhanced interoperability, these protocols will become appealing targets for attackers, who will exploit vulnerabilities arising from the intricate interactions between various protocols and chains,” he added.

Many of the largest hacks in the crypto sector to date have stemmed from bridge exploits, with the notorious $650 million Ronin bridge hack still recognized as the most significant on record.

Without substantial security enhancements in the future, Leclere believes this issue will persist for the industry as it moves into 2024.

Meanwhile, Phil Larratt, director of investigations at Chainalysis, provided a similar warning, indicating that malicious actors will become increasingly skilled at evading capture with their illicit gains.

“In 2024, we can expect that illicit actors will become more sophisticated in their tactics and techniques, particularly as more established traditional organized criminals and financial crime actors begin to adopt crypto,” he stated.

With growing expertise from security firms and law enforcement, Larratt cautioned that the next wave of scammers will likely make greater use of privacy coins, bridges, mixers, and other obfuscation tools.

“In response to this anticipated trend, we will require more intensive law enforcement investigations, enhanced training and knowledge sharing among law enforcement agencies, more advanced fraud protection programs, and continued collaboration between the public and private sectors,” he said.

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