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As digital assets have moved further into the mainstream, criminal networks are scaling just as fast, if not faster. Fraud involving cryptocurrencies has surged in both scale and sophistication, rapidly evolving from opportunistic online scams into a highly organised, industrialised global threat - think of the allegations against Chen Zhi last year.
According to Chainalysis’ 2026 Crypto Crime Report, an estimated $17 billion was stolen through crypto scams and fraud in 2025 alone. The headline number only tells part of the story. What I see in practice is the rapid professionalisation of fraud ecosystems with organised networks running fraud-as-a-service models, selling phishing infrastructure, and even “customer support” to other criminals. Campaigns are more targeted and more effective as a result, reflected in average scam payments jumping from $782 in 2024 to $2,764 in 2025,
a 253% increase.
Artificial intelligence is now supercharging that threat. TRM Labs reports that AI-enabled crypto scams jumped 500% in 2025, while other industry data suggests deepfake-driven scams rose by as much as 700% with generative
AI allowing criminalsto create hyper-realistic videos or cloned voices. These tools allow criminals to impersonate trusted individuals or institutions with chilling realism and at minimal cost. Alongside this, social media platforms have become primary hunting grounds, while long-running “pig-butchering” scams continue to dominate losses, combining cruel romance and impersonation tactics into a single operation.
As a litigator dealing with digital asset recovery, I see the sharp end of crypto fraud including hacked exchanges and sophisticated scams. This often means acting fast by securing urgent injunctions or worldwide freezing orders to trace stolen assets and freeze funds. For victims, the legal reality after a fraud can be stark.
Even where recovery is viable, many individuals simply cannot afford to pursue claims. Cross-border tracing and urgent court applications, for instance, can be complex and costly. Court fees can be intimidatingly high. The result is that viable claims go unpursued, allowing bad actors to go under the radar.
This is where specialist protection products are beginning to change the landscape.
Most insurance products cover before-the-event coverage, and pay fees associated with recovery. Whilst this is an excellent service, many individuals tend not to take out insurance like this as they are being socially engineered.
One after-the-event insurance product is offered through M2 Recovery which has launched a pre-eminent product dedicated to help victims recover digital assets valued above £350,000. The offering is a no-win no-fee basis for after-the-event insurance, meaning this product is available to those who have already lost funds. This lowers the bar for victims and ensures good cases that might otherwise have not been picked up, stand a fighting chance.
With fraud around digital assets continuing to accelerate in scale and complexity, keeping pace can be tricky. What we are seeing is the emergence of a more mature reactive service made up of specialist litigators, forensic investigators and insurers working in coordinated response.
About the author
In addition, Matt chairs techUK’s Digital Asset Working Group and is the founder and host of the In Early podcast, where he interviews leaders across the blockchain and technology sectors.