Bloodbath! AI teams up with $BTC to trigger the biggest fraud wave in history, and your wallet is being overwhelmed by "zero-cost" lies

Fraud has never been an amateur hobby for hackers; it is a serious business worth nearly $500 billion annually. The core formula of this business is simple: maximize revenue, minimize costs. Today, with cryptocurrencies like $BTC and artificial intelligence technology working together, this formula is being rewritten, pushing fraud profits to unprecedented heights.

The essence of cryptocurrency is creating an “anonymous asset on the internet.” It combines the instant, irreversible settlement advantages of cash with the global reach of the internet. For fraudsters, this is nearly perfect: fund transfers require no identity verification, recovery is extremely difficult, and remote, large-scale operations are possible.

Cold data confirms this trend. A report from law enforcement shows that in 2024, cybercrime caused $16.6 billion in losses, with about $9.3 billion related to cryptocurrency payments, a 66% year-over-year increase. Assets like $BTC have quickly become mainstream channels for fraud settlement.

If cryptocurrencies optimize the “settlement layer” of fraud, then artificial intelligence has completely revolutionized the “customer acquisition layer.” The core of fraud is deception—distorting reality. AI is driving down the cost of mass-producing credible lies to nearly zero.

Take the classic “pig-butchering” scam as an example. In the past, high conversion rates required one-on-one human chats, which were hard to scale; mass email campaigns had low conversion rates. AI eliminates this contradiction: it can control thousands of accounts simultaneously, engaging in highly personalized, adaptive conversations, effectively integrating the entire scam operation into an algorithm.

At the same time, AI is systematically dismantling the identity verification systems we rely on. Forging a photo that passes KYC checks, which once required professional Photoshop skills, now takes just minutes with AI. Within a year of ChatGPT’s release, malicious phishing emails increased by 1,265%. Predictions suggest that by 2027, losses from AI-driven fraud in the U.S. alone could reach $40 billion.

In the face of this tech-driven storm, defenders are not helpless. The enormous threat also presents significant investment opportunities. Anti-fraud technology can be broadly divided into prevention and recovery. I believe two areas are particularly critical.

The first is fraud prevention, focusing on building “cryptographic proofs of reality.” AI struggles to forge high-cost physical world realities. The idea is to encapsulate the security properties of the physical world using cryptographic primitives and transplant them into the digital realm.

For example, instead of verifying a easily forged driver’s license photo, verify a cryptographic credential signed by secure hardware that proves the holder’s biometric uniqueness. Technologies like WorldCoin’s iris scans and Octet’s location proofs generated via smartphone sensors are explorations in this direction. These technologies can raise the bar for fraud implementation.

The second is post-fraud recovery, aiming to rebuild a “cryptocurrency asset seizure network.” The irreversibility of cryptocurrencies weakens the risk of recovery; we need an on-chain collaborative system for rapid tracking, freezing, and returning stolen assets.

Current processes are primitive and inefficient, giving criminals enough time to launder funds. Imagine a “Crypto911” system: victims report with one click, exchanges respond in real-time to freeze requests, automatically creating a judicial evidence chain. Teams like Heights Labs are building such infrastructure to increase the cost for fraudsters to evade detection.

Market analysis indicates that the future anti-fraud ecosystem will be much broader, covering on-chain monitoring, fraud insurance, and autonomous agents hunting fraud. The solution is not patchwork fixes but strategic investments in technologies that systematically reduce fraud conversion rates and increase operational costs.

Cryptographic proofs of reality raise entry costs, while seizure chains increase exit risks. Together, they squeeze the survival space for fraud. If our judgment is correct, the next decade will not only see a surge in fraud but also the birth of a whole new underlying security infrastructure.

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