The “Digital Coyote” accounts for 60% of fraudulent funds

In Mexico's crypto ecosystem, a new type of scammer is gaining prominence: the "Digital Coyote," named for leading victims down the path of supposed digital investments and opportunities, using Artificial Intelligence (AI) to create an environment of apparent trust and steal digital assets, according to research by crypto analytics firm Chainalisys.

According to Chainalysis, the impact is alarming, as 60% of the funds sent to fraudulent wallets come from AI-powered scams. These operations don't rely on a single method, but rather on an ecosystem of deceptions that range from facial incarnations known as deepfakes, deceptive emails or messages known as phishing, to fake investment tools and voice cloning.

Unlike traditional online fraudsters, the "Digital Coyote" operates with machine learning models capable of analyzing vast amounts of data, identifying user behavior patterns, and producing tailored fake messages and environments. This allows it to execute thousands of simultaneous scams, tailored to each target's profile, with a level of realism that makes detection difficult.

According to the analysis firm, the use of AI offers the "Digital Coyote" three main weapons that enhance its ability to operate and deceive on a large scale.

First, there's scalability. The second advantage is credibility. AI-generated messages, images, and videos mimic human communication so realistically that they increase the victim's trust, making it harder to detect the deception.

Finally, automation allows fraudulent processes to run without constant intervention. Even while the criminal is inactive, their systems can continue sending messages, creating fake content, and managing interactions with potential victims.

“Now, it's more important than ever to prevent illicit activities like fraud and AI-powered scams before they happen. To counter the rise of AI-assisted crypto scams, researchers are turning to advanced detection techniques that go beyond traditional filters,” said Carlos Jaramillo, Public Sector Sales Director for Latin America at Chainalysis.

Complicated detection

According to the firm, efforts are being made to identify fraud before it occurs.

To do so, they have begun testing technologies capable of recognizing patterns in user behavior, analyzing the language of messages, and modeling online interactions.

These tools can detect warning signs such as unusual phrases, behaviors that appear to be generated by Artificial Intelligence, or the repeated posting of the same message on different platforms in a short period of time.

A key role in this process is played by blockchain analysis, which involves reviewing and tracking all transactions recorded on the blockchain.

The blockchain functions as a public, digital ledger where every cryptocurrency transaction is permanently recorded.

Thanks to this traceability, investigators can follow the path of stolen money: from fraudulent wallets to exchange platforms or mixers, services used to conceal the origin of the funds.