The co-founder of Web3 security startup Quantstamp cautions that because artificial intelligence is developing at an almost breakneck pace, scammers now have access to technologies that can help them carry out complex assaults in large numbers. These hackers are defrauding crypto users using AI scams.

What is an AI Scam?

Hackers Are Defrauding Crypto Users Using AI Scams

An AI scam is a technique a bad actor employs to fleece a company or person. Due to the ease with which AI technology makes it possible to produce convincing copycat text, harmful code, and phony material, many of the same AI scams incorporate some impersonation element.

These AI frauds are developed and delivered online, differentiating them from conventional scams. AI, for instance, makes it much simpler to manufacture digital scams quickly and on a big scale. It implies that a malicious party can create thousands of AI-powered scams and launch a thorough, deliberate attack on a company. A conventional scam would potentially have a far lesser negative effect on a business in the same length of time.

Quantstamp’s Co-founder Reveals More About AI Hackers

Hackers Are Defrauding Crypto Users Using AI Scams

Quantstamp’s Richard Ma revealed at the Korean Blockchain Week that while social engineering attacks have been present for a while, AI is assisting hackers in becoming “a lot more convincing” and raising the success rate of their attacks.

Ma recalled what transpired with one of Quantstamp’s clients when an attacker pretended to be the targeted company’s CTO to demonstrate what the current wave of AI-powered attacks looked like.

“He began messaging one of the other engineers in the company, saying ‘hey, we have this emergency, here’s what’s going on’ and engaging them in a bunch of conversations before asking them for anything,” said Ma.

Ma claimed that these extra procedures make attacks more complex and increase the likelihood that someone may reveal crucial information.

Ultimately, Ma claimed that the sheer scale at which these operations may be carried out poses the greatest existential threat of powerful AI.

More About AI Hackers

Hackers Are Defrauding Crypto Users Using AI Scams

By utilizing automated AI systems, attackers may be able to launch sophisticated social engineering schemes and other types of attacks with little or no human participation across tens of thousands of different businesses.

“There are numerous databases with all the contact details for the important figures from each project in the world of cryptocurrency. If the hackers gain access to it, they might create an AI that sends messages to everyone differently,” the expert claimed.

Ma provided some easy recommendations to people and organizations wanting to protect themselves even though the size and complexity of AI-powered schemes may appear frightening.

Avoiding sending any sensitive information via email or text is the most crucial protective measure. Ma recommended that businesses localize all key data communication to Slack or other internal channels.

Finally, Ma recommended that businesses spend money on anti-phishing software that screens out artificial emails created by AI and bots. According to him, Quantstamp uses anti-phishing software from IronScales, a provider of email-based security services.

Scams in the cryptocurrency community have been on the increase since its inception. The ecosystem has witnessed a number of high-value scams targeted at individuals and exchanges. In 2022 alone, Privacy Affairs reported that hackers scammed crypto investors and companies of $4.7B. This figure was a 37% increase from the money lost to crypto scams in 2021.

With the rise of AI and the advent of other interesting technologies in our world today, we could expect more scams in this industry if we do not take strict security measures to protect our investments and data.

Hence, we believe that the crypto community stands to gain a lot from heeding Quantstamp co-founder’s advice. This warning will help reduce these AI scammers’ success rate or stop them entirely.