Crypto fraud and digital extortion surge as cybercriminals use AI

Law enforcement is struggling to keep up with cybercriminals who increasingly use artificial intelligence to con people with more convincing crypto scams, experts say.

At a joint hearing by the Subcommittee on Border Security and Enforcement and the Subcommittee on Cybersecurity and Infrastructure Protection on Tuesday, witnesses told lawmakers that there has been a surge in cyber attacks because of AI.

“It’s easier to lie with AI, it’s easier to make convincing emails with malicious links, it’s easier to make these deep fakes,” Cynthia Kaiser, senior vice president at the Halcyon Ransomware Research Center, told lawmakers at the hearing.

Ari Redbord, global head of policy at TRM Labs, said that there has been a 500% increase in AI-enabled scam activity over the past year.

Security experts last month told DL News that cybercriminals were increasingly using AI to search for bugs in decentralised finance protocols and then take advantage of errors auditors may have missed.

Economic violence at industrial scale

Criminals using AI are making it harder for people to recognise online scams, the experts said.

Criminals  are using new technology to quickly scan data and learn a victim’s financial details, making a scam all the more convincing, according to Megan Stifel, chief strategy officer at the Institute for Security and Technology.

“They’re using that analysis capability to essentially have a response to every blockade that the victim tries to assert, making it harder for the victims to not make the payment,” she said.

Criminals were making a killing selling AI software to help scammers impersonate others in order to trick victims into making fraudulent investments, Jacqueline Burns Koven, Head of Cyber Threat Intelligence at Chainalysis, told DL News in February.

‘Threat is daunting’ 

There’s a “world of people who couldn’t do attacks yesterday but can today,” Kaiser said.

She added that security teams were going to be exhausted if they didn’t use the same technology as attackers.

Redbord concurred, and added that while the “threat is daunting,” US authorities were working to adopt the same advanced tools as criminals to combat the scams.

“Bad actors are always early adopters of transformative technology,” he said. “We need to move as fast as those bad actors, and the tools exist today.”

Changing laws?

Kaiser, who previously worked at the FBI, suggested changing laws in order to better combat the surge in cybercrime.

“First, the Departments of State, Justice and Treasury could formally evaluate whether terrorism designation authorities under existing law apply to ransomware actors knowingly and repeatedly targeting hospitals,” she said.

“I’m not asking for a designation today — what I’m saying is that we need honest legal analysis towards that, looking at the existing law and determining if departments believe it meets those thresholds.”

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.