The Reputational Challenges of the Crypto Industry
Between 2016’s Bitfinex hack, 2018’s Coincheck hack, and other controversial incidents in recent years, the crypto industry has faced significant reputational challenges. The latest threat to emerge is the use of celebrity ‘deepfakes’ – highly convincing images or videos of famous personalities that are not genuine.
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. For instance, deepfakes of Elon Musk have been used in countless crypto scams, using Musk’s likeness to endorse crypto scam websites and collect tokens from unsuspecting victims.
The Growing Threat of Deepfake Scams
From 2023 to 2024, deepfakes in the crypto sector saw a startling growth of 654%. 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 Vulnerability of the Crypto Community
The crypto community – awash in possible value and filled with tech-savvy members – has become a prime target for 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.
Related: Meta is Testing the Use of Facial Recognition to Fight Deepfake Celeb Ads
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 Personal Security Protocols
Deepfakes are becoming more and more prevalent, and we need to take this new threat seriously. They have been used in various contexts, including:
- Political ads: to manipulate public opinion or sway votes
- Attempts to manipulate personal security protocols: to gain unauthorized access to sensitive information
- Simple mischief or chaos: to create confusion or disrupt social media platforms
Prevention and Detection: What’s Next?
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
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.
The Role of Social Media Platforms
Social media platforms also bear responsibility for thwarting the distribution of deepfake content and must implement stricter measures to penalize those who spread misinformation. They should also implement detection tools to prevent further spread of misinformation.
The Responsibility of Crypto Exchanges
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.
Combating Deepfake Scams: A Multi-Faceted Approach
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. To combat deepfake scams effectively:
- Regulatory compliance framework: Establish clear guidelines and regulations for the use of deepfakes in advertising and other contexts
- Adaptation in detections and checks: Implement advanced detection tools and regular security audits to prevent unauthorized access to sensitive information
- Consumer education: Educate users on how to identify and report suspicious activity, as well as how to protect themselves from identity theft
As deepfake technology continues to evolve, it’s essential that we adapt our approaches to prevention and detection. By working together, we can create a safer online environment for all.
This article is for general information purposes only 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.
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