Spanish police arrest six for $20 million AI-powered crypto investment scam

The Spanish authorities have arrested six people implicated in a sophisticated global investment scam that leveraged artificial intelligence (AI) to defraud over 208 victims of more than $20 million.

The fraudsters utilised deepfake technology and a multi-layered deception strategy. This highlights the growing threat of AI-enhanced financial crimes, a trend experts have warned about for years.

The scam, described by Spanish police as “complex and audacious”, targeted victims worldwide with promises of lucrative cryptocurrency investments. The perpetrators employed AI-generated deepfake advertisements featuring well-known national personalities to lure victims into what appeared to be legitimate opportunities.

The ads falsely guaranteed high returns with “zero risk of asset loss”, a claim that ultimately proved to be the foundation of the fraud.

According to the Spanish National Police, the scammers did not select their victims randomly. Instead, they used advanced algorithms to identify individuals whose online profiles matched specific criteria, such as frequent engagement with financial or cryptocurrency-related content

Once identified, the victims were bombarded with tailored advertising campaigns on websites and social media platforms they frequented. The ads, enhanced by deepfake technology, featured manipulated videos of recognisable figures endorsing the fraudulent investments, significantly boosting their credibility.

The scam involved convincing victims to invest in a fake cryptocurrency platform. Victims were shown fabricated dashboards displaying impressive returns, designed to build trust and encourage further investment.

However, when they attempted to withdraw their funds, they discovered the platform was a sham, and their money had vanished. For most, this realisation marked the beginning of a second wave of deception.

In a cruel twist, the scammers re-contacted their victims, this time posing as investment managers. They claimed the stolen funds had been “frozen” due to technical or legal issues but could be recovered if the victims paid an additional deposit. “The victims, hoping to finally recover their money, deposited without realising they had been scammed again,” the police statement explained.

This second scam preyed on the desperation of those already reeling from their initial losses. But the fraudsters did not stop there.

In a third and final ruse, they impersonated Europol agents or lawyers based in the United Kingdom. They assured victims that their funds had been located and could be returned, provided they paid supposed taxes or fees in the country where the money was allegedly blocked

This triple-layered approach allowed the syndicate to extract maximum value from each victim, with some losing significant sums multiple times.

How the scam agents were apprehended 

Spanish authorities arrested the six suspects, aged between 34 and 57, in the regions of Granada and Alicante following a two-year investigation codenamed “COINBLACK – WENDMINE”.

The probe began after a victim filed a complaint, prompting police to unravel the intricate web of deceit. During a raid on the home of the alleged ringleader, law enforcement seized numerous cell phones, computers, hard drives, a simulated firearm, and extensive documentation linking the group to the scam.

The operation also uncovered evidence of over 50 false identities used by the leader alone, underscoring the sophistication of the criminal network.

The syndicate faces charges of fraud, money laundering, and falsifying documents within a criminal organisation. Investigators revealed that the group created many shell companies to launder the stolen funds, channelling them through a complex network to obscure their origins.

Additionally, authorities have identified several accomplices in other countries, suggesting the scam’s reach extended far beyond Spain. The investigation remains ongoing as police work to dismantle the broader international operation.

The use of AI in this scam aligns with warnings from experts about the rising threat of technology-driven fraud. Blockchain analytics firm Chainalysis, in its “Crypto Scam Revenue 2024” report released on February 13, noted that generative AI has made scams “more scalable and affordable for bad actors to conduct”.

The report estimated that crypto scam revenue reached at least $9.9 billion in 2024, with projections suggesting it could surge to a record $12.4 billion as more fraudulent activities are uncovered.

The Spanish case exemplifies how AI tools, such as deepfake technology, enable criminals to craft highly convincing schemes that exploit trust on an unprecedented scale.

The deepfake ads used in this scam were particularly effective, featuring manipulated footage of prominent figures to lend authenticity to the fraudulent offers. In some instances, the scammers went further, posing as financial advisors or even cultivating fake romantic relationships with victims to deepen their manipulation, a tactic reminiscent of “pig butchering” scams, which Chainalysis identified as a growing trend in 2024.

The Spanish police operation has been hailed as a significant blow to AI-powered financial crime, but it also serves as a stark reminder of the challenges ahead. Despite the arrests, only about €100,000 of the stolen €19 million ($20.9 million) has been blocked or recovered so far, leaving the vast majority of the funds unaccounted for.

This recovery gap highlights the difficulty of tracing and retrieving cryptocurrency once it enters the hands of sophisticated criminals.

Authorities are urging the public to exercise extreme caution when encountering investment opportunities, particularly those promising guaranteed returns or featuring celebrity endorsements.

“Do not be influenced by famous people in advertisements,” the Spanish police warned. “The image of public figures can be manipulated by AI to create highly realistic fake videos.”

The case also underscores the global nature of modern cybercrime. With accomplices identified in multiple countries and victims spanning the globe, international cooperation will be critical to fully dismantling the syndicate.

Interpol and Europol, while not directly involved in the arrests, have been referenced in the scam’s narrative, reflecting the scammers’ audacity in impersonating law enforcement to further their deception.

As AI technology becomes more accessible, experts predict a surge in similar scams in 2025 and beyond. The Spanish police’s success in apprehending these six suspects marks a step forward, but the broader fight against AI-enhanced fraud remains daunting.

Ultimately, this case serves as a sobering reminder of the risks lurking in the digital age, where cutting-edge innovation can be wielded as both a tool for progress and a weapon for exploitation.