Chainalysis, a blockchain analytics firm, revealed a significant increase in pig butchering crypto scams, with illicit revenue soaring nearly 40% year-over-year in 2024.

The firm's data indicates a broader trend of rising crypto scam activities, with the number of crypto deposits into pig butchering scams, also known as romance scams, surging by approximately 210%. This suggests an expansion in the victim pool for such scams, which typically originate from Southeast Asia but now involve scammers dispersed globally.

Pig butchering scams involve building trust with individuals and subsequently luring them into fraudulent investments. In a concerning evolution of tactics, scammers have begun to target the unemployed with deceptive work-from-home job offers, which generate smaller revenue but turn profits more quickly than traditional romance scams.

Despite the growth in overall revenue and deposits, the average deposit amount to pig butchering scams fell by 55% from the previous year, pointing to a shift in the scammers' strategies.

Chainalysis also identified a fraudulent job site that impersonated a record label to offer fake employment opportunities. This site transferred crypto to consolidation wallets linked to pig butchering scams, further highlighting the sophisticated nature of these operations. The report noted an increase in other types of crypto scams in 2024, including address poisoning, crypto drainers, livestream scams, and sextortion.

The firm estimates that crypto scams extracted at least $9.9 billion from victims in the past year, with the discovery of more scam wallets likely to increase this figure.

A significant portion of illicit funds was channeled through Huione Guarantee, a peer-to-peer marketplace affiliated with the Cambodian Huione Group. Since 2021, Huione Guarantee has processed $70 billion in crypto transactions, with onchain data suggesting its extensive use by illegal crypto schemes.

According to Chainalysis, Huione Guarantee has become a hub for illicit actors, providing technology, infrastructure, and resources crucial for conducting scams. This includes assets such as targeted data lists, web hosting, social media accounts, content creation services, and AI software. In 2024, scam vendors using Huione amassed at least $375.9 million in crypto, with AI service vendors' revenue skyrocketing by 1900%.

The data indicates a surge in the use of AI to create hyper-realistic images or videos for impersonation, as well as the sale of stolen personal data to target vulnerable individuals.

The report also mentioned that last year, North Korea's notorious crypto hacker group Lazarus transferred over $150,000 in crypto to Huione's payment app. Huione has not yet responded to inquiries from The Block regarding these findings.

Chainalysis concluded that Huione Guarantee is at the core of a massive, growing, and interconnected scam ecosystem.