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Key Takeaways
Mercuryo's Ashna Vaghela warned that AI crypto scams are evolving faster than traditional security systems.
Chainalysis estimated crypto scams received at least $14 billion in 2025 as average victim payments surged 253%.
Scams and major infrastructure hacks may have reinforced negative sentiment during Bitcoin's downturn.
Crypto fraudsters are using generative AI to create synthetic identities, clone trusted brands, and produce real-time deepfake communications faster than traditional security systems can respond, Mercuryo Chief Customer Officer Ashna Vaghela has warned.
In an interview with CCN, Vaghela said the threat had shifted toward personalized attacks designed to manipulate consumers into approving transactions themselves.
The warning comes as Bitcoin's price decline continues to heighten uncertainty for consumers, with geopolitical tensions weighing on crypto and other risk assets despite sustained institutional investor demand.
Vaghela said AI-powered phishing and deepfake attacks were among the most common threats currently affecting crypto users.
Unlike conventional cyberattacks, which often exploit software vulnerabilities, many emerging scams target human behavior.
Vaghela said this allowed criminals to adapt their methods more quickly than companies could update static security systems.
"These human-centric threats evolve faster than software patch cycles because they exploit behavioral vulnerabilities rather than code bugs," she said.
Over the past 12 months, the threat landscape has undergone a "definitive tactical shift," with retail-focused fraud becoming both more common and harder to identify, the Mercuryo CCO said.
She warned that payment providers relying on older fraud-detection systems could fail to identify synthetic identities.
"What worries me most going forward is the hyper-velocity and mutability of these adversarial tactics," Vaghela said.
"Financial infrastructure providers run the risk of failing silently if they rely on legacy fraud tools that cannot detect real-time synthetic identity threats."
To counter the growing threat without making crypto payments more difficult to use, Vaghela said security would need to become largely invisible to consumers.
That would mean embedding risk controls into transaction flows rather than repeatedly requiring users to complete additional verification steps.
"By running these automated micro-checks invisibly, we can block deepfakes or synthetic identities at the fiat-to-crypto gateway without disrupting the one-tap payment experience users expect," Vaghela said.
Having previously worked at British digital lender Starling Bank, Vaghela said crypto companies needed to show greater "operational empathy" toward mainstream users.
"The most vital lesson is operational empathy, the core understanding that for a new payment technology to succeed globally, people must feel just as safe using it as they do their local ATM," the Mercuryo CCO said.
Traditional fintech companies earned loyalty by prioritizing trust and ease of use, Vaghela added, while parts of the crypto industry continued to treat compliance as an obstacle rather than a product requirement.
"Web3 still needs to learn how to implement this compliance-by-design DNA into crypto infrastructure," she said.
Vaghela also said the crypto industry had historically leaned too heavily on education as its primary response to consumer risk.
"Historically, the industry has leaned too heavily on the idea that we can simply educate our way out of risk," she said.
"It is a losing strategy if it is treated as a standalone defense against sophisticated cybercriminals."
The same problem has widened the trust gap between crypto companies and ordinary consumers, according to Vaghela.
Users have often been expected to understand gas fees, blockchain networks, and irreversible transactions before they can confidently make a simple payment.
"When people do not understand how a financial system works, or what safe behavioral patterns look like within it, they naturally default to a state of high anxiety and distrust," she said.
Traditional financial institutions, by comparison, spent decades teaching consumers basic security practices while providing standardized protections when something went wrong.
"Consumers cannot be expected to trust what they have not been properly equipped to understand," Vaghela said.
Complicated wallet addresses and seed phrases remain among the most significant barriers confronting new crypto users.
However, Vaghela said the industry was closer than many people realized to making those concepts largely invisible.
She pointed to Mercuryo's work providing onboarding and know-your-customer infrastructure for Mastercard's Crypto Credential service for self-custodial wallets.
The service is designed to replace lengthy blockchain addresses with verified, readable aliases, reducing the risk that users send funds to the wrong destination.
"When you pair that seamless identity layer with biometric, Web2-style card-linked mobile checkouts, the user experience becomes identical to a regular neobanking app," Vaghela said.
The long-term objective is to allow consumers to use blockchain-based infrastructure without needing to understand the underlying technology.
As the CLARITY Act continues to stall, Vaghela rejected the argument that stronger regulation would restrict crypto innovation.
Instead, the Mercuryo CCO described clear rules as essential for companies seeking to operate internationally.
"Regulation is not an obstacle," she said.
"Clear, risk-based statutory guidance is an absolute prerequisite for long-term innovation and mass adoption."
A fragmented regulatory landscape makes it harder for companies to develop products that can operate across multiple jurisdictions, Vaghela said.
"When policymakers establish clear rules, like the federal market structure and stablecoin frameworks advancing through the U.S. Senate, it injects immense confidence into the market," she said.
The growing scale of crypto fraud may also indirectly weigh on Bitcoin by weakening investor confidence.
Scams are unlikely to determine Bitcoin's direction on their own, but high-profile thefts and enforcement actions can reinforce negative sentiment.
Chainalysis estimated that crypto scams received at least $14 billion on-chain during 2025, up from its initial estimate of $9.9 billion for 2024.
The average payment made to scammers increased from $782 in 2024 to $2,764 in 2025, representing approximately a 253% increase, according to the report.
Crypto scams and infrastructure attacks have contributed to the loss of confidence in Bitcoin during its 2026 downturn, though they were only one part of a broader market decline.
After reaching an all-time high of $126,198 in October 2025, Bitcoin fell below $60,000 and touched a 21-month low of approximately $58,100 in late June.
While macroeconomic pressures weighed on prices, a series of major security breaches may have reinforced perceptions that the crypto market was vulnerable to theft.
April brought two of the year's largest attacks.
Approximately $292 million was drained from Kelp DAO, while a separate attack removed about $285 million from Solana-based Drift Protocol.
As Bitcoin approached $60,000, renewed criticism of crypto as a speculative or "Ponzi-like" market added to the fear already affecting newer investors.
That sentiment coincided with record withdrawals from US spot Bitcoin ETFs, which saw approximately $4 billion in net outflows in June.
While it would be unfair to attribute those withdrawals specifically to scams, repeated reports of hacks and AI-enabled fraud may have made newer investors less willing to tolerate those wider risks.
