AI fraud and extortion drive surge in cryptocurrency crime this season

The recent presidential pardon has further fostered an “anything is possible” mentality within the online crypto community.

Written by: Olga Kharif, Bloomberg

Translated by: Saoirse, Foresight News

You pick up the phone and hear your grandmother’s voice—she asks you to send her a bitcoin. But you never even knew she was familiar with bitcoin.

“Welcome to crime season.” The term “crime szn” is used on social network X to refer to the surge in various digital scam cases.

The “crime season” in the crypto space is cyclical, usually appearing at a specific stage of a digital asset bull market: when asset prices are high and retail investor enthusiasm is at its peak. For criminals seeking easy targets, this situation is highly tempting.

This year’s “crime season” has seen quite a few “highlights” (or blemishes).

According to blockchain intelligence firm TRM Labs, so far hackers have stolen over 2.7 billions USD, including 1.5 billions USD stolen by North Korea’s Lazarus Group from the Bybit exchange earlier this year—a record-setting amount. By comparison, the total amount stolen in crypto hacks for all of 2024 was 2.2 billions USD.

“Essentially, it’s about scale and attention,” said Ari Redbord, TRM’s Global Head of Policy. The company helps law enforcement track and combat crypto crime. “Criminals go where the money is—and this year, the money is concentrated in crypto.”

With bitcoin and other token prices hitting all-time highs, global retail crypto trading volume grew by more than 125% from January to September 2025.

In addition to targeting centralized exchanges, criminals have also set their sights on a range of DeFi projects. Just this week, a protocol called Balancer suffered a vulnerability exploit, resulting in a loss of 110 millions USD.

According to data from blockchain intelligence firm TRM, physical attacks specifically targeting crypto holders and project founders to seize their assets—commonly known in the community as “wrench attacks”—have now reached an all-time high.

(Note: A wrench attack refers to a crime where violence or physical coercion is used to force victims to reveal their private keys, transfer passwords, or directly move crypto assets.)

Redbord said: “More and more project founders, traders, and early investors now hold large amounts of crypto assets, often in self-custody wallets—which makes the temptation to seize assets through physical coercion even greater. Moreover, ‘wrench attacks’ have a very low barrier to entry for criminals; there’s no need for technical skills, just track the target’s social media activity to determine their whereabouts, then use brute force to make them comply.”

Meanwhile, compared to the aggressive approach taken during the Biden administration, enforcement by agencies such as the U.S. Securities and Exchange Commission (SEC) has weakened under the Trump administration.

The recent presidential pardon has further fostered an “anything is possible” mentality within the online crypto community.

Post by @chainyoda on X platform

Additionally, attackers are leveraging the rapid development of artificial intelligence tools—it is now as simple as a mouse click to create convincing deepfake audio and video content.

TRM found that from May 2024 to April 2025, scams using generative AI increased by as much as 456%. The company testified in Congress earlier this year that criminals may “clone the voices of victims’ friends and family to call for help and commit fraud.”

TRM also found that scammers use deepfake facial overlays during video calls to impersonate others and carry out “romance scams” and “pig-butchering” schemes; AI is also used for phishing attacks and even laundering stolen funds.

So, next time someone who sounds or looks like your grandmother asks you to send bitcoin, don’t do it.