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According to a recent report by Bitget Research, cryptocurrency losses due to deepfake-related scams are expected to surpass $25 billion in 2024, more than doubling the previous year’s figures.
The crypto 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 late May report showing that deepfakes have been ranked as the second most frequent information security concern for businesses in the United Kingdom. Earlier this week, ReadWrite reported that a five-hour YouTube Live broadcast featuring a deepfake of Elon Musk promoted a cryptocurrency scam today, continuing a recent trend of similar fraudulent streams.
Crypto users in the crosshair
The crypto industry specifically experienced a 217% rise compared to the same period in 2023. Bitget reported $6.3 billion in crypto losses attributed to deepfakes in Q1 2024 alone, projecting 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 over half of all such losses in the past two years.
In a comment for Cointelegraph, BitgetCEO Gracy Chen emphasized the urgent need for measures to combat this trend. Chen said:
Deepfakes are moving into the crypto sector in force, and there is little we can do to stop them without proper education and awareness
Fraudsters often impersonate influential figures to create an illusion of credibility and attract investments. Other applications of deepfake technology in crypto crimes include cyber extortion, identity fraud, and market manipulation, though these represent a smaller portion of overall losses.
Bitget predicts that without effective countermeasures, deepfakes could be involved in 70% of crypto crimes by 2026. Ryan Lee, Bitget Research’s chief analyst, told Cointelegraph:
Right now, exchanges need to pay attention to their ‘Proof of Life’ features of the KYC systems the most […] This feature essentially confirms that the user is a real person and not a static image or a video, through real-time actions like blinking, moving or secondary ‘Proof of Life’ requests.
The research also warns of deepfakes potentially bypassing Know Your Customer (KYC) measures, emphasizing the importance of robust “Proof of Life” features in exchange security systems.
As deepfake technology advances, the crypto industry faces growing challenges in maintaining security and trust. Exchanges and users alike must remain vigilant and adapt to these evolving threats.
