Bitget Research projects that cryptocurrency losses due to deepfake schemes and scams will exceed $25 billion by 2024, nearly doubling the losses from the previous year.
Based on past Sumsub study data, the cryptocurrency exchange reported on June 27 that there will be 245% more deep fakes globally in 2024.
The countries with the highest number of deep fakes discovered in the first quarter of 2024, according to Bitget, were China, Germany, Ukraine, the United States, Vietnam, and the United Kingdom. The crypto industry, on the other hand, experienced a 217% increase from Q1 2023.
According to Bitget, the increase in deepfakes resulted in cryptocurrency losses of $6.3 billion during the first quarter. It further stated that by 2025, it expected losses to reach $10 billion every quarter.
According to Bitget CEO Gracy Chen, there is little we can do to stop deepfakes without sufficient education and awareness, and they are aggressively entering the crypto business.
Deepfake technology is used in phishing attacks, Ponzi schemes, and fake projects to fool cryptocurrency investors, resulting in the majority of crypto losses.
More than half of all cryptocurrency losses resulting from deep fakes have been offset by this strategy throughout the past two years.
According to Bitget Research, these schemes use the personas of well-known individuals to conjure up the appearance of legitimacy and significant project funding, luring victims into making substantial investments without conducting adequate due diligence.
Con artists frequently target Michael Saylor, the executive chairman of MicroStrategy. Saylor stated in January that every day, his team eliminates about 80 phony films of him produced by artificial intelligence (AI), most of which are meant to spread misinformation about cryptocurrency scams.
According to Bitget, deepfakes are also employed in identity and impersonation fraud, market manipulation, and cyber extortion. To manipulate the price of a token, for instance, one could fabricate a comment from a news anchor or influencer. Still, their percentage was far lower than that of cryptocurrency scams.
70% of crypto crimes may involve the deployment of deep fakes.
Bitget projects that by 2026, 70% of crypto crimes may involve deep fakes if appropriate safeguards aren’t put in place.
According to Bitget Research principal analyst Ryan Lee, criminals are using fictitious images, movies, and sounds more frequently to gain more control over their victims.
For example, a phony video of an influencer may serve as an ancillary tool to boost investor trust in a fraudulent business, but a film mimicking a person close to the victim could be crucial for fraudsters.
According to Lee, the employment of AI-powered voice impersonators, which enables con artists to call people posing as their relatives and demand money, is one of the more pressing issues with deep fake technology.
Another would be deepfakes, which go around Know Your Customer (KYC) security protocols to access a user’s money without authorization.
According to Lee, exchanges currently need to focus primarily on the KYC systems’ “Proof of Life” capabilities.
By using real-time activities like blinking, moving, or secondary “Proof of Life” requests, this functionality effectively verifies that the user is a real person and not a static image or video.
He said, “We use advanced AI solutions to quickly identify and prevent cases of deepfake usage. We warn all of our users of this upon registration.”
