How artificial intelligence turned the crypto market into a fraud factory

The architecture of decentralized finance (DeFi) no longer belongs to enthusiasts and developers. In reality, it’s been taken over. GetBlock AML Research explains who now controls the DeFi market — and how AI fits into the picture.

What used to be small-time scammers running simple schemes from home has evolved into organized, industrial-scale operations. These groups use artificial intelligence to deceive at scale: creating fake identities, manipulating markets, and exploiting human psychology.

In 2025 alone, roughly $17 billion was drained from the crypto market. What’s more alarming than the number itself is the growth rate: identity fraud and AI-driven tools surged by 1,400% in just one year.

Scammers are increasingly using large language models (similar to ChatGPT) to mask their operations. As a result, even blockchain transparency no longer guarantees safety — distinguishing legitimate projects from scams is becoming nearly impossible.

How AI-Powered Crypto Scams Work

Today’s scams are no longer chaotic — they’re systematic and highly efficient. Fraud tools have become cheap and widely accessible. Voices can be cloned, videos generated, and text fully automated. Many of these tools are sold online for the price of a standard streaming subscription.

The effectiveness is striking. AI-driven operations generate, on average, 4.5 times more profit than traditional methods — about $3.2 million per successful attack. The real danger lies in scale: a single operator can control thousands of bots across Telegram, Discord, and X (Twitter). These bots:

• pose as customer support
• infiltrate crypto project teams
• carry out long-term psychological manipulation

There are even fully automated scam call centers powered entirely by AI — from voice to scripts to responses.

“AI Projects” as a Scam Tactic

Over the past two years, one of the easiest ways to deceive investors has been simply adding “AI” to a project’s branding. A wave of so-called “DeFAI” (DeFi + AI) tokens promised:

• smart trading bots
• automated portfolio management
• decentralized machine intelligence

In reality, most turned out to be empty shells — often basic scripts built over a weekend and hooked up to ChatGPT APIs.

Example: GriffAIn ($GRIFFAIN) Marketed as an advanced AI agent for managing crypto wallets, the project reached a $422 million valuation. Later, it became clear the “technology” was just a facade. The real goal was to distribute tokens to insiders and sell at peak hype.

Example: Hey Anon ($ANON) This project promised an AI trading assistant but was backed by a developer known for failed crypto schemes. In practice, it was little more than a chat interface connected to an AI model. Projects like this were массово launched, hyped, and abandoned along with investor funds.

Syndicates, Fakes, and Artificial Hype

Scammers no longer just build projects — they manufacture entire realities around them.

One notable group, the Solana Syndicate, started with simple rug pulls. Later, they began using AI to create fake influencers — fully generated online personas.

These accounts posted provocative content (wars, crises) to gain millions of views, then redirected attention to specific tokens. Once interest peaked, a classic pump-and-dump followed.

Identity Fraud at Scale

Scammers have begun impersonating well-known figures. Fake images featuring Binance’s former CEO Changpeng Zhao (CZ) circulated widely to build trust. At one point, CZ had to publicly deny their authenticity and clarify they were AI-generated.

Fake Books and Emotional Manipulation

In 2025, scammers escalated further by releasing a fake autobiography of CZ titled Beyond Borders.

The book was entirely AI-generated and sold through legitimate marketplaces. It included fabricated personal stories designed to build trust and emotional connection — followed by prompts to invest in a related token.

Deepfakes and Fake Livestreams

One of the most dangerous tools is deepfake video. Scammers hack popular YouTube channels and run fake livestreams featuring Elon Musk, Vitalik Buterin, or Cathie Wood promoting new “investments” with returns of up to 30% per day.

In reality, these are synthetic videos with cloned voices.

One such campaign attracted 165,000 viewers and generated over $1.6 million in just 72 hours.

“Ghost Tokens” and Market Manipulation

Scammers create tokens that appear popular but are entirely controlled behind the scenes.

Example: $PIPPIN The token originated from a simple AI-generated unicorn image.

The scheme followed a familiar pattern:

• dozens of linked wallets created fake demand
• the price was artificially inflated
• once retail investors entered, insiders sold

The token ultimately dropped 84%, leaving investors with heavy losses.

Fraud in Real Time

The $RIZZ token collapsed by 90% during a livestream hosted by its own creator. It was later revealed that insiders controlled 80% of the supply and sold into incoming retail demand.

Faking Death for Profit

In 2025, a developer behind the Zerebro project staged his own death during a livestream. At the same time, a “memorial token” was launched. While the audience reacted emotionally, he cashed out approximately $1.4 million. He was later found to be alive.

Don’t repeat this at home: fake suicide for $1,5 million

A young and hopeful prodigy made money by convincing everyone he was dead

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When Fraud Reaches the State Level

Even political figures have been drawn in. Argentine President Javier Milei mentioned the $LIBRA token, triggering a surge to a $4.5 billion market cap. Within three hours, insiders withdrew $100 million.

It was later revealed the entire narrative was built around an AI-generated backstory to simulate legitimacy.

Anatomy of a political scam: how LIBRA and NYC Token cost investors millions

Politicians have found a new way to profit from crypto. No need to sell courses — just launch a memecoin

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Attacks on AI Tools Themselves

Scammers are now targeting not just users, but AI systems directly. Malware can hijack AI agents and gain access to crypto wallets. Fake software installers are also spreading, designed to steal passwords and private keys.