Crypto scam losses could reach $17B as approval phishing operations scale, says Chainalysis

Crypto scam revenue could climb to as much as $17 billion from activity recorded in 2025 as investigators continue identifying illicit addresses linked to fraud networks, according to new findings from blockchain analytics firm Chainalysis.

In a report published on June 17, Chainalysis said on-chain scams generated at least $14 billion in 2025. It is expected to rise as additional scam-linked wallets are attributed.

The firm also found that the average payment sent to a scam address increased 253% year-over-year. In contrast, AI-enhanced scams were 4.5 times more profitable than those that did not use AI.

The findings were released as part of Chainalysis’ latest research into approval phishing. This is a tactic commonly used in crypto investment scams to gain access to victims’ wallets.

Approval phishing remains a key scam technique

According to Chainalysis, approval phishing tricks users into authorizing malicious smart contract permissions that allow attackers to drain funds from their wallets.

Victims are often convinced they are approving a routine transaction, such as a token swap or transfer. In reality, the approval grants a scammer ongoing access to wallet assets, enabling funds to be moved at a later date without further authorization.

The firm said approval phishing frequently forms part of broader investment scam operations. The operation involves social engineering, fake advisors, and coordinated attempts to move users from regulated exchanges into self-custody wallets.

Chainalysis investigators identified several recurring warning signs.

It includes customers providing scripted explanations for transactions, sudden large crypto purchases by individuals with no prior digital asset activity, and victims being guided through transactions by supposed mentors who demand immediate action.

Law enforcement operations target phishing networks

Chainalysis said approval phishing operations remain vulnerable because scammers often reuse the same wallets, spender contracts, and cash-out infrastructure across multiple victims.

The company highlighted several enforcement initiatives aimed at disrupting those networks.

Operation Spincaster, launched in 2024, processed more than 7,000 investigative leads. It helped authorities address approximately $162 million in losses linked to approval phishing schemes. The company said one potential victim was warned before losing a six-figure amount after investigators identified the scammer’s wallet approvals in time.

Chainalysis also pointed to Operation Atlantic, a joint effort involving agencies in the United Kingdom, Canada, and the United States. The operation identified more than 20,000 victims, froze over $12 million in suspected criminal proceeds, and traced an additional $45 million in stolen cryptocurrency connected to related schemes.

AI increases profitability of crypto fraud

The report adds to growing concerns about the role of artificial intelligence in online fraud.

While Chainalysis did not break down the specific AI tools being used, the company found that scams incorporating AI-generated content, automation, or other AI-assisted techniques generated significantly higher returns than traditional operations.

The findings suggest that scammers are becoming more efficient at identifying targets, conducting social engineering campaigns, and scaling fraudulent operations across multiple platforms.

Final Summary

• Chainalysis estimates crypto scam revenue could rise from at least $14 billion to as much as $17 billion as more illicit addresses are identified.
• The firm found AI-assisted scams were 4.5 times more profitable than traditional schemes. It said approval phishing remains a major tactic used in investment fraud.