What happened

Scammers are found to be using ChatGPT and other AI-powered chat tools to create more credible interactions with victims of cryptocurrency fraud, and to help scale and automate their activities.

A report by security company Sophos shows how scammers use dating or language-learning apps to initiate contact, establish fake romantic relationships, and lure victims into investing in fictitious cryptocurrency liquidity pools or mining schemes. 

The scammers use AI chatbots, including ChatGPT, to sustain more authentic and prolonged conversations, overcoming language barriers and enabling simultaneous engagement with multiple victims.

The scams are known to cause significant financial losses and severe emotional and psychological damage to victims. 

Why it happened

The adoption of large language models such as ChatGPT by scammers has streamlined the labour-intensive nature of traditional pig butchering scams, allowing for rapid, personalised interaction while bypassing language limitations.

Scammers benefit from low barriers to entry enhanced by fraud kits sold underground, and exploit the lack of adequate regulation and enforcement in the decentralised finance and cryptocurrency industries.