In 2025, financial fraud targeting retail trading platforms reached alarming heights, with impersonation scams experiencing a staggering growth of 1,400% year-over-year. Criminals are leveraging artificial intelligence and phishing-as-a-service tools to deceive unsuspecting investors, as highlighted in a new report by blockchain analytics firm Chainalysis. This surge underscores the industrialization of fraudulent activities, with sophisticated technologies empowering even those with limited technical skills.
As a result of these developments, professional money laundering networks are now processing billions in stolen funds annually. The report indicates that AI-enabled scams were particularly effective, extracting 4.5 times more money per operation compared to traditional methods in 2025. The total losses from crypto scams reached $17 billion, driven by advanced operations utilizing AI, phishing tools, and organized crime networks.
Retail Brokers Struggle Against Daily Fraud Attempts
The increase in impersonation attempts has compelled retail brokers to allocate dedicated teams to combat fake websites and social media accounts. Tamas Szabo, CEO of Pepperstone, noted that the firm takes down scam sites impersonating their brand “on an almost daily basis,” despite having acquired over 100 domain variants to mitigate misuse. “We”ve purchased over a hundred variants of our domain, but haven”t been able to capture them all,” he stated, emphasizing the overwhelming challenge posed by these fraudsters.
The issue extends beyond cybersquatting, as criminals increasingly impersonate not only trading platforms but also regulatory bodies. For instance, the UK”s Financial Conduct Authority (FCA) recorded 4,465 reports of impersonation scams in the first half of 2025, with 480 victims transferring money to criminals masquerading as FCA officials. Additionally, Malta”s financial regulator issued warnings about scammers using forged documents and fake signatures, while Cyprus reported multiple impersonation cases involving their staff.
Phishing-as-a-Service Expands Fraud Accessibility
The Chainalysis report reveals that criminal enterprises have developed modular, service-based business models that significantly lower entry barriers for aspiring fraudsters. Vendors in Chinese-language forums on Telegram are offering complete phishing kits for as little as $20 to $50, which include fake website templates, domain setup tools, and spam distribution services designed to evade detection.
One notable vendor, Lighthouse, reportedly received over 7,000 deposits, amassing more than $1.5 million before legal action was initiated by Google in November 2025. This operation was alleged to have sent out 330,000 messages in a single day, successfully deceiving over 1 million individuals across 121 countries, according to court documents.
Operations utilizing these advanced phishing kits have proven 688 times more financially effective than traditional scams, while those that purchased bulk social media accounts were found to be 238 times more effective, according to the data.
Deepfakes Enhance Fraud Tactics
Artificial intelligence has emerged as a potent tool for scammers targeting retail investors. Authorities in New Zealand issued warnings about deepfake videos featuring local financial experts endorsing fraudulent trading schemes via platforms like Facebook and WhatsApp. The AI-generated content has been alarmingly convincing for victims unfamiliar with the technology.
Globally, financial institutions have noted a 2,137% increase in deepfake fraud attempts over the past three years, as reported by identity verification firm Signicat. Deepfakes now account for 42.5% of all fraud attempts in the financial sector, marking them as the most prevalent form of digital identity fraud encountered by companies today.
Law Enforcement Takes Action Against Fraud
In response to the escalating crisis, law enforcement agencies have stepped up their enforcement efforts. The UK”s Metropolitan Police recovered over 61,000 bitcoins, valued at approximately $5 billion, in connection with an investment fraud that affected more than 128,000 individuals. Similarly, the U.S. Department of Justice unveiled charges against individuals accused of operating forced-labor scam compounds in Cambodia, with seizures surpassing $15 billion.
European regulators coordinated efforts to dismantle over 1,400 fraudulent trading platforms throughout 2025, building upon earlier actions that shut down 800 illicit domains. Additionally, Germany”s BaFin identified at least 20 nearly identical websites promoting AI-based trading services without verifiable operators or regulatory oversight. The average scam payment escalated from $782 in 2024 to $2,764 in 2025, reflecting scammers” success in targeting more sophisticated investors with larger account balances.
