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The Perfect Storm: How AI and Crypto Supercharged Romance Scams

Fraud Prevention

February 24th, 2026

Kushal Edwankar, Product Manager, NICE Actimize
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Modern romance scammers have perfected a devastating business model: exploiting loneliness by selling the illusion of love. For years, they faced two critical constraints — the limitations of human labor and the challenge of laundering money through the banking system without detection.

These constraints are eroding. Artificial intelligence now acts as the front door, enabling highly personalized attacks. Cryptocurrency functions as the exit door, allowing funds to move quickly and with limited recovery options. Together, these tools have elevated romance scams to an industrial scale of exploitation.

How the Front Door/Exit Door Model Supercharges Fraud

Romance scams traditionally follow three stages: target discovery, synthetic identity creation and grooming.  With AI, what was once a manual, one-to-one operation is becoming a scalable system that enables parallelized victim targeting.

  • Target Discovery now operates at scale. Tools like Social Searcher and specialized Telegram bots scrape social media and dating apps to identify people going through major life changes. They flag loneliness indicators — divorce filings, death of a partner, recent relocations — pinpointing the most vulnerable targets with algorithmic precision.
  • Synthetic Identity Creation leverages a basic human tendency: we trust people we can see and hear. AI tools like This Person Does Not Exist generate photorealistic faces of people who never existed. Voice-cloning platforms like ElevenLabs replicate voices to create convincing videos. The result: an assembly line churning out "perfect partners" indistinguishable from real people.
  • Grooming — the slow building of trust and emotional connection — used to require scammers to maintain conversations manually, message by message, day by day. AI bots powered by models like Super-AI and LoveGPT now handle this automatically. These purpose-built tools manage dozens of simultaneous relationships, maintaining nuanced, consistent conversations for months without human intervention.

The barrier to entry has collapsed. Dark web marketplaces now rent these AI tools for as little as $90 per month, enabling "Romance Scam as a Service." The economics favor fraudsters: low operating costs, automated scale, hyper-personalized manipulation.

The data confirms the transformation. According to Chainalysis, AI-enabled scams in 2025 were 4.5 times more profitable than traditional scams. Transaction volume reinforces this shift: 35.1 transfers per day versus 3.89 for traditional scams — a 9x increase in activity demonstrating both higher value and volume.

The Exit Door: How Crypto Completes the Perfect Crime

Once AI establishes trust and captures the victim's emotional investment, the operation shifts to monetization. Increasingly, that movement occurs through cryptocurrency channels.

Cryptocurrency was designed for speed, global reach and decentralized control. Those same features — high-speed transfers, reduced friction, pseudonymity, irreversibility and limited central oversight — can be exploited for fraud. For scammers, this enables rapid movement of funds with minimal recovery options.

The FBI's 2024 IC3 Report documents the surge in fraud use. Cryptocurrency as an exit method for all reported crimes jumped from 7% by volume in 2022 to 23% in 2024 — a 200% increase. By value, it rose from 35% to 57% — a 64% increase. Cryptocurrency investment fraud alone resulted in $5.8 billion in losses in 2024, up 47% from 2023.

While these numbers span multiple fraud types, romance scams particularly benefit from crypto's characteristics. The reason: romance scams operate on an "Effort Once, Rewards Continuous" mode l— a recurring revenue stream. UK Finance data shows romance scams average nearly 11 separate payments per case, the highest among all scam types. Victims continue sending money over months because sustained emotional manipulation reinforces the illusion of legitimacy.

Traditional cryptocurrency's volatility once posed a risk to scammers — stealing 1 Bitcoin today might mean losing 15% of its value overnight. Stablecoins eliminated that uncertainty. Pegged to fiat currencies like the USD, they offer scammers predictable gains: $1 stolen today is $1 laundered tomorrow. The result: stablecoins now power most crypto-enabled crime.

The combination is devastating. AI expands scale and sophistication with limited traceability. Cryptocurrency provides a point of no return for victims.

Regulatory Response in Early 2026: Progress and Gaps

Just a few months into 2026, the regulatory landscape shows both meaningful progress and persistent gaps in addressing the front door and exit door dynamics simultaneously.

Platform Accountability

The Safeguarding Consumers from Advertising Misconduct (SCAM) Act, introduced in the U.S. Congress in early 2026, represents a significant effort to address the front door problem. The bill explicitly identifies romance scams as part of the fraud epidemic it aims to combat, alongside government impersonations and AI-powered impersonations using cloned voices and stolen images.

The legislation would prohibit online platforms from displaying fraudulent or deceptive commercial advertisements. It would require social media companies to implement verification procedures and fraud detection systems, while expanding enforcement authority for the FTC and state regulators. Platforms would face 72-hour investigation requirements and 24-hour removal obligations once fraud is confirmed.

The challenge is economic, according to Reuters, major tech platforms make billions of dollars from scammers who advertise on their sites. Without meaningful financial disincentives, the motivation to change remains questionable.

Meanwhile, the UK offers a cautionary example. The Crime and Policing Bill Amendment (Clause 117), introduced in January, proposed making technology and telecommunications firms liable for reimbursing fraud victims. It was withdrawn following government assurances. The Online Dating and Discovery Association opposed the measure, arguing that tech platforms aren't directly involved in money movement or payment processing and shouldn't bear liability.

This highlights a fundamental accountability gap: platforms profit from user engagement that enables scammer access but resist responsibility for the consequences.

Cryptocurrency Regulation: Federal vs. State Tensions

On the exit door side, the regulatory picture is even more concerning.

The Digital Asset Market Clarity Act, introduced in January to establish crypto market structures, reportedly contains a provision (Section 205: Digital Assets Kiosk) that could undermine state-level consumer protections. In 2025 alone, at least 11 states — including North Dakota, Arizona and Nebraska — passed laws focused on curbing cryptocurrency fraud, particularly targeting crypto kiosks used in scam operations.

 The federal provision could preempt existing state protections and limit future state-level initiatives, potentially weakening oversight of crypto kiosks.

The GENIUS Act Paradox

The GENIUS Act, signed into law in July 2025, establishes a two-tier regulatory framework for stablecoins: those with market capitalizations over $10 billion fall under federal oversight, while smaller stablecoins can opt for state-level regulation. The Act aims to maintain U.S. dollar dominance as a global reserve currency through strict rules on reserve backing, disclosures and marketing.

However, the Act's focus on legitimizing stablecoins as mainstream payment instruments creates an unintended vulnerability. By normalizing stablecoin transactions, the regulation may eliminate the friction that currently triggers victim hesitation.  Fraud actors would face fewer credibility hurdles, without a corresponding reduction in their operational flexibility.

The question becomes unavoidable: will this regulation inadvertently usher in a golden age of crypto crime?

The Enforcement Challenge

Beyond policy design lies enforcement reality. Romance scams operate across borders. Cryptocurrency enables near-instant, irreversible transfers through decentralized networks with no central authority to compel cooperation. Synthetic identities leave no real person to prosecute. By the time victims realize they've been scammed, money has typically moved through multiple wallets across multiple jurisdictions.

The regulatory landscape remains characterized by uncertainty — fragmented approaches, unclear timelines and fundamental disagreements about where accountability should rest.

For Victims, Nothing Has Changed

Despite technological evolution in how scams operate, the fundamental victim experience remains constant. People end up alone, unprotected, bearing the full emotional and financial trauma.

AI and crypto have created a self-reinforcing system where each technology amplifies the other's effectiveness, operating at speeds and scales that outpace regulatory response. For scammers, conditions are optimal.

The targets remain the same: good, trusting and generous people — the very qualities that make someone a strong partner.  Those same traits can make them more susceptible to manipulation by a fabricated persona designed to exploit trust and extract money.

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