How to Protect Yourself from Cryptocurrency AI Scams

Cryptocurrency has exploded in popularity since it first made its appearance in 2009. It’s fast, it skips the bank fees, and if you play your coins right, it might even make you rich. But unlike the money in your checking account, cryptocurrency isn’t government-backed or FDIC-insured. It’s volatile, vulnerable, and increasingly exploited by scammers armed with AI.

In this blog, we’ll cover the basics of cryptocurrency, the clever AI-powered scams targeting it, and how to protect yourself and your assets.

What Is Cryptocurrency?

Cryptocurrency is a digital-only currency you can buy, sell, or transfer online, via exchanges, apps, websites, or even cryptocurrency ATMs using a phone or computer. People use it for quick payments, to dodge traditional bank fees, or as a high-risk investment. You can also “mine” crypto, a process that involves using advanced computers to solve complex mathematical puzzles.

Once you’ve got some cryptocurrency, you can stash it in a digital wallet. But beware: lose your password, send money to the wrong address, or get hacked, and it’s likely game over. Recovering your assets can be challenging, and it’s unlikely you’ll get your money back.

One of the most famous examples of cryptocurrency is Bitcoin, which was the original cryptocurrency launched in 2009. Today, it’s still the most popular cryptocurrency in a market of over 25,000 cryptocurrencies.

AI-Powered Crypto Scams You Need to Know

As AI technology evolves, scammers are leveraging it to create sophisticated traps. Here's how artificial intelligence is being weaponized in crypto cons:

Deepfake Investment Scams

Scammers use AI to create realistic videos or images of well-known figures endorsing fake crypto projects. For instance, in the 2023 Noxdep Crypto Scam, AI-manipulated footage portrayed famous faces like Cristiano Ronaldo and Elon Musk endorsing a fraudulent trading platform, Noxdep. Victims were tricked into depositing real Bitcoin into the fake platform with the promise of free crypto giveaways activated by special promo codes.

Voice-Cloning Cons

Give scammers 10 seconds of audio, and AI can mimic your best friend’s voice - or your boss’s. They’ll call or message pretending to be someone you trust, claiming an urgent need for crypto. It’s emotionally manipulative, eerily convincing, and financially devastating if you fall for it.

Phishing and Fake Sites

AI-generated phishing emails and websites are becoming nearly indistinguishable from the real deal. These traps lure you into typing wallet keys or login credentials into lookalike crypto platforms. Once the scammers have your info, your digital wallet vanishes faster than your free trial reminder.

Rug Pulls

Scammers hype a flashy new coin, token, or NFT project, collect investor cash, and then vanish, leaving nothing but broken links and broken hearts. One infamous example: OneCoin, a Ponzi scheme that raked in $4 billion. Its founder? Still on the run. AI helps scammers juice these projects with fake social proof, including phony followers, likes, and “activity” to boost credibility.

Romance Scams

Crypto love stories rarely have happy endings. Scammers build long-term online relationships, then pitch “exclusive” investment opportunities. AI chatbots and social personas keep the emotional ruse going, until victims are convinced to send funds that they’ll never see again.

How to Protect Yourself from AI Crypto Scams

You don’t need to become a cryptography expert to protect yourself from crypto scams. Here are a few smart habits that can go a long way in detecting and preventing these scams:

Verify the Source

Scammers love impersonation. Always double-check social media accounts, announcements, or messages to make sure they’re coming from or leading to an official account or representative. Minor spelling tweaks can turn a fake profile or message into a convincing dupe. Before you invest in any new crypto opportunity, visit the source or official site directly. Never trust links from DMs, comments, or “too good to be true” tweets.

Don’t Click That Link

Phishing links are digital landmines. To avoid them, cross-check URLs by examining the website address closely. Scammers will often send messages with links that look legitimate but redirect you to fake sites designed to steal information. Best practices are to type URLs into the address bar manually, or use bookmarks for your go-to crypto sites.

Use Strong Security Tools

Enable multi-factor authentication (MFA) on all accounts. MFA requires two forms of authentication to access your account or application. Authentication methods can be a combination of biometrics (e.g. fingerprints or face ID), your password, and/or a code sent to your phone or authenticator app. Hardware tokens such as a Yubikey are another great way to protect your sensitive data. These tokens generate a unique code when inserted into your device, providing an extra layer of security as they are extremely hard for scammers to clone or bypass. A VPN (virtual private network) can also protect you from snoopers on public Wi-Fi by encrypting your traffic and masking your IP address.

Stay Alert to Voice Scams

As mentioned earlier, voice cloning is alarmingly easy now. If you get a weird call from a loved one or colleague asking for crypto, verify through another channel. Don’t trust the voice; trust the facts. Want to get ahead of these scams? Look into vishing (voice phishing) to learn more about how these scams work and how to spot them.

For More Support, Join the Herd

Crypto is like the Wild West of finance. And with AI in the mix, scammers are becoming more convincing than ever. But with a little caution, some strong security practices, and the right tools and training, you can hold onto your coins and your peace of mind.

Let Herd help. From deepfake detection modules to realistic phishing simulations and micro-trainings on AI-based threats, Herd gives your team the skills to pause, question, and protect themselves and your business. Book a demo with Herd CEO Brandon Min to learn more.