Deep Fake Scams Could Cost Crypto Industry $25B in 2024, Warns Bitget

Deepfakes have caused massive financial damage, with up to $79.1 billion stolen since 2022 through this technique. It has now become a growing threat in the crypto industry.

Bitget Research warns that deepfake scams could cost the crypto industry $25 billion in 2024 alone. This figure will more than double the losses recorded last year. 

Deepfake Attacks Surge in Crypto World

Deepfakes entail creating fake videos and images leveraging AI, machine learning tools, and other complex technologies to impersonate influential figures and swindle money from unsuspecting victims.  

In a June 27 report, the crypto exchange Bitget shared some scary numbers, noting that deepfakes will grow by 245% worldwide in 2024. 

According to the exchange, China, the United States, Germany, Vietnam, and Ukraine saw the most deepfakes in Q1 2024. 

Further, the crypto world saw a 217% jump in deepfake scams compared to the first quarter of 2023. According to the report, this increase translated to $6.3 billion in crypto losses in Q1 2024 alone.

Gracy Chen, Bitget’s CEO, says deepfakes are eating deep into the crypto sector, and proper education and awareness will help fight it. 

Most losses come from fake projects, phishing, and Ponzi schemes, where perpetrators use deepfake technology to appear genuine and gain investors’ trust. Over the last two years, these scams accounted for over half of all deep fake-related crypto thefts.

Bitget says scammers use deepfakes to make projects look real and trustworthy. These scammers impersonate influential personalities, masterminding projects that appear genuine with illusive credibility and projecting false capitalizations. As a result, investors trust them, investing substantial amounts of funds without conducting proper due diligence.  

For instance, popular figures like Michael Saylor are common targets for scammers. In January this year, Saylor revealed that his team destroyed up to 80 fake AI-generated videos of him daily. These videos often promote Bitcoin scams to trick money out of unsuspecting victims. 

Importantly, Deepfakes are also used for blackmail, identity fraud, and market tricks. For example, fake news reports or statements from a famous influencer can change token prices, but these aren’t as common as crypto scams.

The Possible Future of Deepfakes in Crypto Crimes

Experts worry deepfakes will get worse as the crypto space evolves. And without effective control measures, Bitget says deepfakes might be used in 70% of crypto crimes by 2026. 

Ryan Lee, a Bitget Research analyst, says criminals are becoming more innovative with fake videos, pictures, and audio, making it appear like the actual person endorsed the scam project. Impersonating someone the victim trusts or an influential figure can bolster investor confidence. 

One big concern is AI-powered voice fakes; scammers can call people pretending to be their family. They ask for money, and it sounds natural. Another primary concern is fake identities used to bypass security checks. Lee encourages exchanges to integrate better security measures like “Proof of Life.” 

Such measures check if a user is genuine by asking for live actions like blinking or moving. It’s not perfect, but it helps.

Notably, Lee warns all new Bitget users about deepfakes. He claimed Bitget uses AI to spot fakes quickly. However, as technology improves, the fight against deepfakes will get more challenging, so everyone must stay alert and keep learning about these threats.