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Veronika Rinecker
Editor
Veronika Rinecker
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Blockchain analytics firm Chainalysis has acquired Alterya, an AI-powered fraud detection startup, for a reported $150 million, marking its first significant foray into artificial intelligence (AI).
“With Alterya, Chainalysis is doubling down on its strategy to invest in the prevention of illicit transactions,” the company stated in its blog post from Jan. 13, following the acquisition of Web3 security platform Hexagate last month.
We are thrilled to announce our acquisition of Alterya, the AI-powered fraud detection solution that identifies scammers before they meet their victims to provide real-time prevention for fintechs, crypto exchanges and banks.
Together, Chainalysis and Alterya will provide a… pic.twitter.com/2FBkhqDthP
— Chainalysis (@chainalysis) January 13, 2025
A “Holistic” Approach to Financial Crime
Alterya, founded in 2022 and backed by $9.8 million in seed funding from Battery Ventures, Y Combinator, NFX, and Nyca, uses AI agents to detect and prevent scams targeting financial institutions, fintech, and crypto service providers.
Alterya has already worked with major crypto exchanges like Binance, Block, and Coinbase. The acquisition will enable Chainalysis to improve its fraud detection capabilities, particularly in the Know Your Customer (KYC) process and real-time payment protection.
Chainalysis aims for a “holistic” approach to financial crime, integrating prevention, compliance, and remediation. This includes tracing fraud origins from traditional finance into crypto. Alterya’s expertise in monitoring over $8 billion in monthly transactions across crypto and fiat rails will be crucial for Chainalysis to offer new services addressing the financial crime landscape.
Generative AI Fuels Sophisticated Scams
This deal comes amid a surge in crypto-related fraud, with scams costing the industry billions of dollars annually. According to Chainalysis, the rise of generative AI has further exacerbated the problem, making fraud more scalable and easier to execute:
“Fraud and scams have long been a scourge on the financial services industry, from the rise of credit card fraud to today’s sophisticated social engineering scams. Scammers can easily produce high-fidelity fake content and identities, deceiving users across social media and communication platforms to authorize payments under false pretenses.”
Generative AI makes it more difficult for financial institutions and crypto businesses to detect when scammers “quickly monetize through crypto and real-time payment systems”.
Alterya itself detected $10 billion sent to scams in 2024 and found that 85% of scams exploit fully verified accounts, bypassing traditional identity checks.
Effective fraud detection and compliance “rely on granular, real-time data,” and, by integrating Alterya’s technology with Chainalysis’ blockchain data, Chainlink tries to enhance both.
Cryptocurrency Crime on the Rise
Cybercriminals continued their relentless assault on the cryptocurrency ecosystem in 2024, stealing over $2.3 billion across 760 reported on-chain incidents, according to CertiK’s Web3 Security Report 2024.
This represents almost 32% increase compared to 2023, with criminals averaging $3.1 million per incident.
The numbers from 2024 are in, and the Web3 ecosystem faces significant challenges. Over $2.36B was stolen across 760 incidents, marking a 31.61% increase from the previous year.
Dive into the 2024 Hack3d Report to see the insights that shaped the year and what’s next.👇🧵 pic.twitter.com/86QyfYia8M
— CertiK (@CertiK) January 2, 2025
Phishing attacks reigned supreme, emerging as the most prevalent and costly threat. Nearly 300 incidents, resulting in $1.05 billion in losses, were attributed to phishing scams, as per CertiK’s report. These attacks exploit unsuspecting victims by directing them to fraudulent websites designed to steal login credentials and gain control of their cryptocurrency wallets.
Data breaches continue to fuel these attacks, providing cybercriminals with valuable information to personalize their phishing attempts.
A recent example saw a revamped phishing campaign targeting Ledger hardware wallet users, leveraging data leaked in a previous breach.
In December 2024, Ledger users reported that phishing scammers were spoofing the crypto hardware wallet provider’s support emails in a bid to trick users into revealing their wallet keys. These bogus emails claimed Ledger suffered a “recent data breach” and encouraged recipients to verify their private seed phrase under the guise of needing to “safeguard” their assets.
Hey @Ledger someone has spoofed your REAL support email and is currently sending this to people to get them to expose their recovery phrase
For a company we’re all forced to trust for custody of our assets, this is not a good look pic.twitter.com/9GIz6wJi3O
— Tony (@0xRacist) December 16, 2024
Despite appearing to originate from Ledger’s legitimate support email, BleepingComputer reported that these emails were actually sent through an email marketing platform.
Ledger responded to an X user concerned about the emails, saying that “scam attempts are an unfortunate part of life online and no one is completely immune.”
