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AI-Powered Crypto Scams Surge as Victims Fear Speaking Out
Last Updated: March 05, 2025
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Key Takeaways
- AI-driven crypto scams are on the rise, with fraudsters using social media and ATMs to deceive victims;
- Fear of blame prevents many fraud victims from reporting crimes, allowing scammers to continue unchecked;
- Regulators call for better media literacy and stronger fraud detection to combat rising crypto-related scams.
Claire McHenry, deputy director of Nebraska’s Department of Banking and Finance and president of the North American Securities Administrators Association (NASAA), is set to address the Securities and Exchange Commission (SEC) Investor Advisory Committee on March 6.
In her testimony, she will highlight the rising threat of fraud involving digital assets, mainly as scammers use artificial intelligence (AI) to make their schemes more convincing.
Additionally, she will stress that states are seeing more complaints, investigations, and legal actions related to digital assets than any other type of financial misconduct.
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McHenry points out that cryptocurrency ATMs, social media, and AI-driven scams are becoming key tools for fraudsters. One Nebraska-based crypto ATM operator reported that 98% of the funds passing through its machines were linked to scams.
Many victims, especially older individuals, hesitate to report fraud, often because they fear being blamed for falling for a scam rather than the criminals being held accountable.
She stated:
These (older) investors are tempting targets as they have accumulated wealth over their lifetimes but may lack the technological savvy needed to detect and avoid scams.
NASAA’s 2024 Enforcement Report reveals that digital assets are tied to more fraud cases than any other financial product. Reports of scams involving cryptocurrencies have surpassed those linked to stocks, Ponzi schemes, and other fraudulent investments.
Recently, Illinois Senator Dick Durbin proposed a new bill called the Crypto ATM Fraud Prevention Act. What does it entail? Read the full story.
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