Crypto needs to increase defenses against 654% spike in deepfake scams

Opinion by Ilya Brovin, chief growth officer at Sumsub. Ilya is an expert in crypto operations and regulations worldwide and has over 20 years of experience in finance and private quality. He holds a degree in economics and finance and an MBA from Harvard Business School.

Between 2016’s Bitfinex hack, 2018’s Coincheck hack and other controversial incidents in recent years, the crypto industry has faced significant reputational challenges.

In 2024, a new threat emerged: crypto scams featuring celebrity “deepfakes” — highly convincing images of people appearing genuine but who are not. These scams use realistic deepfake images and videos of famous personalities to deceive crypto enthusiasts, leveraging this technology to exploit the unsuspecting, perpetrate fraud and confuse less tech-savvy individuals. 

As deepfake technology gets increasingly convincing — even to those with a trained eye — deepfake scams threaten not only our wallets but our very sense of reality. The old saying “if it looks like a duck…” may not ring true for much longer.

The evolution of deepfake technology 

Deepfake technology has advanced rapidly in a short time, making it increasingly difficult to distinguish authentic images or videos from fake ones. Deepfakes of Elon Musk, for example, have been used in countless crypto scams, using Musk’s likeness to endorse crypto scam websites and collect tokens from unassuming victims. From 2023 to 2024, deepfakes in the crypto sector saw a startling growth of 654%, and of all the detected deepfake attempts in 2024, 74% happened in the crypto industry. 

Initially used for entertainment and artistic purposes, deepfakes have found a darker application in the realm of identity theft, cybercrime, blackmail, social engineering or other nefarious purposes. The erosion of trust in the media or in legal realms due to visual or audio evidence now being less reliable is also a growing risk.

Fraudsters continue to target the unregulated, and the crypto community — awash in possible value and filled with tech-savvy members — has become a prime target for these sophisticated scammers looking to make some quick cash. The “hype” around crypto — that it’s still newer and exciting and full of possible riches — also creates an ecosystem hospitable for scams.

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The crypto space is further vulnerable to deepfake scams due to its reliance on digital interactions and the high value of many transactions. Scammers use deepfakes to create convincing personas of well-known figures to trick individuals into investing in fraudulent schemes, as well as deepfakes of everyday people to steal their identity and gain access to digital wallets. 

From political ads to attempts to manipulate personal security protocols to simple mischief or chaos, deepfakes are becoming more and more prevalent, and we need to take this new threat seriously. 

Prevention and detection: What’s next? 

The days of deepfake videos featuring humans with 16 fingers or a mouthful of teeth resembling a shark are largely behind us. Current deepfakes are deeply convincing, especially in the social media age where consumers may only spend 10 seconds looking at a video, and even less on an image — particularly when a celebrity is a subject, as there is inherent trust in a familiar face. 

Detecting deepfakes with the naked eye can be challenging, but there are telltale signs that can help:

• Bad sync between lips and audio that looks like bad audio dubbing. 

• Unnatural skin texture, features and mannerisms, or other “uncanny” appearances. 

• Odd movements, inconsistent lighting, or strange text or backgrounds that, upon closer inspection, could not be real. 

As with any emerging threat, awareness is key, and education on these signs is crucial.

Due to the threat to the public, lawmakers in 15 US states introduced legislation in 2024 to combat misinformation and deepfakes, particularly their use in political campaigns. While it’s useful that politicians are aware of the deepfake issue and attempting to curb its use, consumer education remains paramount, as many people don’t directly engage with political content regularly. 

Social media platforms also bear responsibility for thwarting the distribution of deepfake content and must implement stricter measures to penalize those who spread misinformation, as well as implement detection tools to prevent further spread of misinformation.

Beyond the risk of celebrity deepfakes luring users to scam exchanges, there’s an extra layer of complexity with crypto fraud and deepfakes. Everyday users are also left open to identity theft through the leveraging of deepfakes —  particularly in the age of social media, where many users share enough information to empower scammers of almost any skill level.

The responsibility lies with the crypto exchanges to ensure all checks are in place, especially Know Your Customer, and to recognize patterns in fund exchanges. The rise and impact of crypto fraud, especially those stemming from deepfakes, means both government and enterprise intervention through establishing frameworks and roadblocks to protect all users. 

As deepfake technology continues to evolve, beyond user awareness, the combination of regulatory compliance framework, adaptation in detections and checks, and consumer education in what makes a legitimate crypto exchange can better protect against the growing threat of deepfake scams.

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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.