The top three European Supervisory Authorities (ESAs) — the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) — published two factsheets designed to “help consumers protect themselves” from digital asset-related scams and to explain how fraudsters are using artificial intelligence (AI) to deceive consumers.
“Fraud and scams are not new, but they have become much more sophisticated. Technologies like AI and blockchain make frauds and scams more convincing and harder to detect,” said an ESMA press release on Monday. “For example, AI-generated voices or videos can impersonate friends or family members. The consequences for consumers can include financial loss, identity theft, and emotional distress.”
Specifically, the factsheets explained some common tricks used by scammers, including phishing, impersonation, investment scams, and Ponzi schemes, and gave concrete real-world examples, such as being persuaded to invest in a specific crypto token on the promise of large returns, only for the price to crash and the contact who recommended it to disappear.
The factsheets also provided practical tips to help consumers recognize and avoid such schemes, including never sharing personal or banking information, always pausing to think before acting, and verifying the source of any messages received.
The ESAs’ advisories were likely inspired by another bumper year for digital asset-related crime. By July, blockchain analysis firm Chainalysis was already reporting a record-breaking year for “crypto crime,” with over $2.17 billion already stolen from cryptocurrency services by mid-year 2025.
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Factsheet on digital asset fraud and scams
The eight-page factsheet on digital asset-related scams and frauds outlined 11 warning signs for consumers, ranging from the seemingly obvious to the more insidious. This included being alert for promises that seem too good to be true, unsolicited offers, requests to send or share private keys and seed phrases, limited-time offers that pressure you to act immediately, and requests for payment via untraceable methods.
It went on to highlight a few prominent types of scam, one being so-called “pump-and-dump” schemes and “rug pulls,” whereby scammers artificially inflate or overstate a low-value digital asset to increase its value (‘pump’), while holding — often through a series of anonymous accounts — a large amount of the asset themselves. The scammers then sell off their assets (‘dump’), causing the value to crash and leaving investors with huge losses; alternatively, they might shut down the project entirely and disappear with the funds, which is known as a “rug pull.”
Another increasingly prevalent scam that the factsheet warned of was the ‘romance investment scam’, sometimes known as “pig butchering.” In this particularly insidious scheme, the scammer/s will develop an online or virtual relationship with the victim—often romantic—and then convince them to invest more and more money in fraudulent investments. The scammer extracts as much money as possible, then cuts off all communication and disappears.
A report published in 2024 by Chainalysis estimated that cybercriminals stole over $12 billion from their victims in 2024, with pig-butchering recording the highest growth of any ‘crypto’ scam, growing 40%.
Other top scams that the ESAs warned of were Ponzi schemes, phishing and impersonation scams.
When a consumer finds they have fallen victim to one or another of these, the factsheet advised a number of steps, namely immediately stopping transactions, changing passwords on all devices and apps/websites, disconnecting and revoking access, moving funds, contacting the crypto provider, reporting the incident to the police or national financial supervisory authority, and being careful of “recovery room”-fraud, where a fraudster may contact the victim of a previous scam claiming to be a public authority and offering to recover their lost money for a fee.
But the digital asset space wasn’t the only sector singled out as a risk to consumers; AI was also the subject of a scams and frauds factsheet.
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AI factsheet
According to the ESA’s second factsheet, “criminals now use fake messages and websites, false celebrity profiles, and even AI-generated voices or videos that look like your banker, your friends or your family to trick you.”
It added that, despite online scams and frauds not being a new phenomenon, “AI has made them smarter and harder to spot.”
The factsheet went on to outline some of the warning signs associated with AI schemes, including “poor grammar or formatting in official-looking documents,” intonation that sounds unnatural, lacks pauses and seems overly fluent or robotic, and videos where the lip movements and facial expression may be misaligned with the speech, or have inconsistent shadows.
In terms of examples, many were reminiscent of some of the digital asset schemes, such as romance and phishing scams. However, the factsheet emphasized the particular prevalence of deepfake and impersonation scams facilitated by AI.
When it comes to what to do when a person becomes a victim of an AI-related scam or fraud, the ESAs’ list of recommended actions was the same as that for victims of digital asset schemes.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
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Source: https://coingeek.com/european-regulators-warn-consumers-on-crypto-ai-scams/
