Tech
Predicted Cryptocurrency Losses from Deepfake Scam in 2024 Exceed $25 Billion – Bitget
According to a recent report from Bitget Research, cryptocurrency losses due to deepfake-related scams are expected to exceed $25 billion in 2024, more than doubling the previous year’s figures.
The cryptocurrency exchange’s study, released on June 27, highlights a 245% increase in global deepfake incidents in 2024, drawing on data from Sumsub research. The first quarter of 2024 saw China, Germany, Ukraine, the United States, Vietnam and the United Kingdom leading in deepfake detections.
The news follows a report at the end of May showing that deepfakes were ranked as the second most frequent cybersecurity concern for businesses in the UK. Earlier this week, ReadWrite reported it’s five hours Youtube Live broadcast with a deepfake of Elon Musk promoted a cryptocurrency scam today, continuing a recent trend of similar fraudulent flows.
Crypto Users Under Fire
Specifically, the cryptocurrency sector saw a 217% increase compared to the same period in 2023. Bitget reported $6.3 billion in cryptocurrency losses attributed to deepfakes in the first quarter of 2024 alone, predicting this figure to reach $10 billion per quarter by 2025.
The most common deepfake-related crypto scams involve fake projects, phishing attacks, and Ponzi schemes, accounting for more than half of all such losses in the past two years.
In a comment for Cointelegraph, Gracy Chen, CEO of Bitget, highlighted the urgent need for measures to combat this trend. Chen said:
Deepfakes are spreading across the cryptocurrency industry and there is little we can do to stop them without proper education and awareness
Fraudsters often pose as influential figures to create an illusion of credibility and attract investment. Other applications of deepfake technology in crypto crimes include cyber extortion, identity fraud, and market manipulation, although these represent a smaller portion of overall losses.
Bitget predicts that without effective countermeasures, deepfakes could be involved in 70% of cryptocurrency-related crimes by 2026. Ryan Lee, chief analyst at Bitget Research, he told Cointelegraph:
At this time, exchanges need to pay more attention to the “Proof of Life” features of KYC systems […] This feature essentially confirms that the user is a real person and not a static image or video, through real-time actions such as blinking, moving around, or secondary “Proof of Life” prompts.
The research also warns against deepfakes potentially bypassing Know Your Customer (KYC) measures, underlining the importance of reliable “Proof of Life” features in exchange security systems.
As deepfake technology advances, the cryptocurrency industry faces increasing challenges in maintaining security and trust. Both exchanges and users must remain vigilant and adapt to these evolving threats.