“Anyone can fall victim – no matter how smart, experienced, or tech-savvy they are,” said Nick Smart, Chief Intelligence Officer at Crystal Intelligence, during a recent Cointelegraph AMA focused on crypto fraud and personal safety in Web3. He broke down the rise of AI-powered scams, the emotional toll of fraud, and why current regulatory frameworks are still lagging behind the tactics used by global scam networks.

Smart noted a sharp increase in AI-enhanced fraud, including deepfake video scams, hyper-personalized phishing attacks, and AI-written investment pitches. “Fraudsters are using AI to produce native-sounding scripts and emotionally manipulative dialogue that’s extremely hard to detect,” he warned. “It’s psychological profiling at scale.”

Discussing one of the most damaging trends, he mentioned so-called romance scams, also known as “pig butchering” – a term Smart openly rejects due to its dehumanizing nature. These long-term frauds build fake emotional relationships before coercing victims into sending crypto. “It’s betrayal, it’s shame, and in some cases, it leads to mental health crises or even suicide.”

Smart emphasized that anyone can be targeted, not just elderly or inexperienced users. “We’ve seen finance professionals, behavioral scientists, even government officials fall for these scams,” he said. “Scammers don’t need to outsmart the best – just someone vulnerable at the moment.”

The cross-border nature of crypto fraud is one of the biggest challenges. Scammers deliberately operate from jurisdictions with weak extradition treaties and slow law enforcement coordination. “It’s a structural problem,” Smart explained. “Even if you know who did it, getting justice is nearly impossible without international cooperation.”

To fight back, Crystal Intelligence urges victims and allies to report fraud early and publicly, using platforms like Scam Alert, Chainabuse, and regional police portals. “Preserve every message, wallet address, and transaction,” Smart advised. “Even if it doesn’t help you right away, it builds a case that could help someone else or support asset recovery later.”

He also emphasized the importance of community reporting: “Think of scam prevention like picking up litter. If everyone reports just one suspicious address or website, we can dramatically reduce harm across the space.”

Smart’s call to action included both practical and psychological advice. “Don’t beat yourself up if you get scammed. These people are master manipulators. The most powerful thing you can do is share your story and help others avoid the same mistake.”

To avoid being a target in the first place, Smart recommends a mindset shift: think like a magician’s audience, but don’t consent to the trick. “If someone randomly offers you love, investment returns, or a business deal that seems too good to be true, pause and ask: ‘If this were a lie, how would it work?’ That single question could save you everything.”

Smart also emphasized the importance of speed: if a victim reports fraud within the first 10 minutes, there’s a much greater chance of intervention. “That’s when the game starts,” he noted. From there, Crystal’s tools trace stolen funds across blockchains, services, and currency swaps, following the trail to a point where law enforcement can act.

He shared one case involving a fake Elon Musk giveaway scam, where a victim lost €40,000. As Crystal traced the funds, they uncovered a broader scam network – dozens of similar sites, the same wallet behavior, and identical branding. The kicker? While writing the report, the scam wallet suddenly became active again after nine months of silence. That allowed Crystal and law enforcement to freeze the funds. “It was a small win, but meaningful.”

Asked what would most improve the fight against crypto crime, Smart was blunt: “International cooperation.” Fraudsters exploit jurisdictional gaps, he said, and only joint efforts can close them. “Every country suffers from crypto crime. It’s money that should build schools and hospitals – stolen to fund palaces and Lambos.”

Smart ended the session on a hopeful note: “We’re getting better. Law enforcement is getting better. But we need to move faster. Because while we follow the rules, the criminals don’t. And we can’t let them win.”

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