Recently, Ari Redbord, Global Head of Policy at TRM Labs, testified before the House Judiciary Subcommittee on Crime and Federal Government Surveillance, addressing the escalating intersection of artificial intelligence (AI) and criminal activity.
The hearing, titled “Artificial Intelligence and Criminal Exploitation: A New Era of Risk,” spotlighted the potential of AI—both as a potential tool for technological breakthroughs and a weapon for illicit actors.
Redbord’s testimony underscored the urgent need for proactive measures to counter AI-enabled crime while leveraging the same technology to bolster law enforcement and public safety.
Redbord, a former federal prosecutor and senior official at the U.S. Treasury Department’s Office of Terrorism and Financial Intelligence, brought his expertise to the discussion.
His testimony highlighted a recurring theme from his career: criminals are often the earliest adopters of transformative technologies.
Just as automobiles, pagers, and cryptocurrencies were once co-opted for illicit purposes, AI is now being weaponized to perpetrate fraud, cyberattacks, and exploitation at unprecedented speed and scale.
Redbord noted that generative AI tools are enabling criminals to craft phishing emails in multiple languages, create deepfake videos for extortion, develop synthetic identities for money laundering, and execute autonomous cyberattacks.
Drawing from TRM Labs’ work, Redbord outlined three phases of criminal AI adoption.
The “horizon phase” includes potential applications, such as rogue states like North Korea—already responsible for over $1.6 billion in cryptocurrency hacks in 2025—using AI to identify cybersecurity vulnerabilities or automate complex money-laundering schemes.
The “emergent phase” sees AI tools deployed alongside human operators, while the “operational phase” involves fully autonomous AI-driven crimes.
This framework, informed by TRM’s blockchain intelligence and open-source scam-reporting platform Chainabuse, illustrates the evolution of AI-driven threats, from deepfake scams to ransomware targeting critical infrastructure like hospitals and schools.
Redbord emphasized that AI is not inherently malicious—it’s a tool.
In the hands of law enforcement, financial institutions, and innovators, AI can be a defense against these threats.
TRM Labs, for instance, uses analytics to detect and investigate illicit financial activity in the digital asset ecosystem, supporting agencies worldwide.
Redbord cited examples of AI-driven defenses, such as deepfake detection tools and blockchain intelligence, which enable real-time tracking of illicit transactions.
He stressed the importance of public-private collaboration, urging Congress to foster partnerships that enhance information sharing and resource allocation to combat AI-enabled crime effectively.
The hearing also addressed broader implications. Zara Perumal of Overwatch Data highlighted how generative AI lowers barriers to cybercrime, making sophisticated attacks accessible to less-skilled actors.
Representative Lucy McBath raised concerns about privacy, cautioning that law enforcement’s use of AI must include safeguards to protect citizens’ data.
Redbord echoed this, advocating for updated legal frameworks that balance product / tech development, privacy, and security.
He called for Congress to ensure that law enforcement has access to AI tools and blockchain intelligence to keep pace with criminals, drawing parallels to the FBI’s creation in 1908 to address crimes enabled by the Model T.
TRM Labs’ 2025 Crypto Crime report, referenced during the hearing, underscores the shifting landscape of illicit activity, with a noted decrease in illicit crypto volumes in 2024 but a rise in AI-driven crimes.
Chainabuse reported a staggering 456% increase in AI-related crime between May 2024 and May 2025, highlighting the urgency of Redbord’s recommendations.
As AI reshapes society, Redbord’s testimony serves as a clarion call for vigilance and collaboration.
By equipping law enforcement with advanced tools, fostering global cooperation, and updating regulatory frameworks, Congress can help ensure that AI’s potential for good outpaces its exploitation by criminals.
TRM Labs remains focused on blending blockchain intelligence with AI to safeguard the financial system, indicating that technology can be both the challenge and the solution in this new era of risk.