Elliptic Report Uncovers AIDriven Future of Crypto Crime

Elliptic Study Unveils AI as the Future Driver of Crypto Criminal Activity
Harvey Hunter
Latest update:
June 7, 2024 09:09 EDT
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2 minutes read
An insightful Elliptic report has brought to light the emergence of AI-powered crypto crimes, ushering in a new era of cyber threats that are being utilized for deepfake scams, state-sponsored attacks, and other sophisticated illicit endeavors.
The report acknowledges the positive impact of artificial intelligence (AI) on various industries, including the AI cryptoasset sector. This technological innovation has given rise to numerous projects that have the potential to redefine the AI crypto landscape.
However, as is the case with any new technology, there is a risk of malicious actors exploiting these advancements for unlawful purposes.
As a result, Elliptic advocates for a thorough examination of early indicators of illegal activities to safeguard long-term innovation and mitigate emerging risks at their inception.
Celebrity Deepfakes, Leaders, and Crypto Executives
Elliptic has shed light on the use of deepfakes and AI-generated content to promote crypto scams.
Deepfake videos often leverage the likeness of influential personalities such as Elon Musk and former Singaporean Prime Minister Lee Hsien Loong to endorse fraudulent investment schemes.
These videos falsely suggest official endorsement, giving credibility to the scam among potential victims.
Large-scale scams like “pig butchering” romance scams involve maintaining prolonged communication with victims throughout the scam.
Elliptic has also reported instances of deepfake technology being used to impersonate high-ranking executives during virtual meetings, exploiting their authority to potentially authorize substantial transactions that impact both corporate and crypto sectors.
AI-Enhanced Illicit Markets
Tools like ChatGPT can be employed to create or check code for vulnerabilities. This has significant implications for the crypto space, as it can facilitate cybercrime by identifying vulnerabilities on a large scale.
Decentralized crypto applications often rely on open-source code, like smart contracts, which makes them susceptible to exploitation. The rise of DeFi auditing aims to address these risks.
However, while AI has the potential to streamline smart contract audits, auditors are cautious about its current capabilities. There is a concern that hackers could leverage AI to quickly identify vulnerabilities in DeFi protocols.
Dark web forums are exploring the use of large language models (LLMs) for crypto-related crimes, including reverse-engineering wallet seed phrases and automating scams like phishing and malware deployment.
Dark web markets offer “unethical” versions of GPTs tailored for AI-driven crypto crime, designed to evade detection by legitimate GPTs.
The report highlighted WormGPT, described as the “foe of ChatGPT”, as a tool that openly facilitates the creation of phishing emails, carding, malware, and malicious code.
United States Issues Warning on Korean AI Crypto Crime
The United Nations has attributed more than 60 cryptocurrency heists to North Korean state actors, resulting in over $3 billion stolen from 2017 to 2023. Reports suggest that North Korea is exploring the use of AI to enhance their hacking capabilities.
According to the report, Anne Neuberger, the U.S. Deputy National Security Advisor for Cyber and Emerging Technologies, has raised concerns about the growing threat of AI-based criminal activities.
The report also highlighted North Korea’s advancements in AI research since 2013, particularly focusing on applications like facial recognition and potential military uses. Kim Il Sung University has been involved in AI program development, collaborating with Chinese entities in this domain.
While Elliptic has not found direct evidence of hostile state actors using AI on blockchains, these groups are experimenting with large language models (LLMs) to enhance their hacking skills.
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