Case Study

How AnChain.AI Helped Police Crack a $300K Crypto Romance Scam — 10x Faster

February 3, 2025

THE CHALLENGE

Cracking Down on Crypto Romance Scam

A success story how AnChain.AI industry leading financial crime investigation AI platform supported a local police department to investigate and recover the victims from the cryptocurrency romance scam.

In late 2022, the Whitestown Police Department in Indiana was approached by the victim of a $300,000 cryptocurrency romance scam—a growing category of “pig butchering” fraud where criminals combine long-term emotional manipulation with fake investment platforms.

The victim initially engaged with the scammer via SMS, later migrating to WhatsApp for ongoing personal and financial discussions. After an initial “test” investment successfully returned a small profit, the victim was persuaded to invest heavily—borrowing money to contribute a total of $269,000 into the scammer’s trading platform.

To further the illusion of legitimacy, the scammer even sent back $219,000 to the victim’s account. When the victim later attempted to withdraw $300,000, they were informed they needed to prepay a 10% “withdrawal tax” fee—a common social-engineering tactic to extract additional funds before the fraud is exposed.

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Whitestown Indiana, a fast growing city in the midwest.

The Growing Threat

Crypto-related romance scams accounted for over $2.5B in losses globally in 2022, up 79% YoY (FBI IC3 Data).
Average victim loss in these scams exceeds $100K, with recovery rates historically below 5%.
Post-fraud fund movements can involve 50–200+ transactions across multiple blockchains in the first 48 hours.

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The Impact on Investigators

Why Manual Investigation Struggles

Investigating cryptocurrency-related romance scams presents three major forensic challenges:

Speed of Fund Movement – Criminals can disperse funds through dozens of wallets within minutes, often using automated scripts and smart contracts to evade detection.
On-Chain Obfuscation – Use of privacy-enhancing techniques such as chain-hopping (swapping assets across blockchains), mixers, and DEX-to-DEX hops significantly increases trace complexity.
Resource Constraints – Traditional blockchain forensic tools require manual tracing and investigator expertise, limiting case throughput to just a few per month per analyst.

This means time-to-first-hit—the time from report to first actionable lead—can stretch into weeks or months.

Illustrative Example of AnChain.AI Auto Trace AI - NOT related to this specific case.

THE RESOLUTION

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Tracking 10x Faster With Artificial Intelligence

Using AnChain.AI’s CISO Investigation Platform, Whitestown Police leveraged the 1-Click Auto-Trace feature to instantly reconstruct a full transaction graph from the victim’s initial wallet activity to downstream endpoints.

Key Technical Capabilities Used:

Graph-based Auto-Trace AI: Built on AnChain.AI’s proprietary address clustering and smart contract interaction graphing algorithms, capable of resolving >98% of high-risk entity attribution in seconds.
Cross-Chain Tracking: Automatically detected and followed funds across Ethereum and multiple EVM-compatible chains without manual re-querying.
Exchange Endpoint Identification: Pinpointed deposits into a Binance hot wallet cluster, providing jurisdictional escalation points for recovery.

Metrics from This Case:

Case Timeline Reduction: From an estimated 3–4 weeks (manual) to 3 days using AI-assisted tracing.
Investigator Productivity: Estimated 10x increase in case throughput (from 2–3 cases/month to 20–30 cases/month per investigator).
Attribution Confidence: >95% confidence score on entity clustering before exchange subpoena.

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Outcome & Broader Impact

By dramatically reducing investigation time, Whitestown Police were able to quickly secure actionable leads and initiate legal cooperation requests with the centralized exchange before further fund dissipation.

This case reinforces the critical role of AI-powered blockchain analytics in countering romance scams, which are increasingly leveraging cryptocurrency as their primary payment rail.

Industry Implication:
As scams evolve with new laundering methods (e.g., DeFi protocol layering, NFT-based fund obfuscation), the integration of agentic AI in investigations will be essential for maintaining investigative parity with cybercriminals.

About AnChain.AI
AnChain.AI’s CISO Investigation Platform is trusted by global regulators, financial institutions, and law enforcement agencies to deliver high-confidence attribution, full-chain transaction tracing, and advanced DeFi analytics—empowering investigators to turn weeks of work into hours. Schedule a call with our experts ! https://www.anchain.ai/demo

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