Bitget Research predicts that losses from crypto-related deep fakes and scams will exceed $25 billion in 2024, more than doubling the losses from the previous year. The research report, based on data from Sumsub, revealed a 245% increase in the number of deep fakes globally in 2024.
During the first quarter of 2024, deep fakes were most prevalent in China, Germany, Ukraine, the United States, Vietnam, and the United Kingdom. The crypto industry experienced a 217% increase in deep fake incidents compared to the first quarter of 2023.
In the first quarter alone, deep fakes resulted in $6.3 billion in crypto losses. Bitget Research anticipates that losses will escalate to $10 billion per quarter by 2025. Gracy Chen, the CEO of Bitget, emphasized the need for education and awareness to combat the rising threat of deep fakes infiltrating the crypto sector.
Common tactics employed by deep fake fraudsters include fake projects, phishing attacks, and Ponzi schemes. By leveraging deep fake technology, scammers can deceive cryptocurrency investors and gain their trust. This method has accounted for more than half of all deep fake-related crypto losses over the past two years.
Michael Saylor, the executive chairman of MicroStrategy, has been a frequent target of deep fake fraudsters. Saylor revealed that his team removes approximately 80 AI-generated fake videos of him on a daily basis, often promoting Bitcoin-related scams.
In addition to these fraudulent activities, deep fakes are also utilized for cyber extortion, identity and impersonation fraud, and market manipulation. For instance, scammers may create fake statements from influencers or news anchors to manipulate token prices. However, these activities make up a smaller portion of crypto scams.
Bitget predicts that without effective measures, deep fakes could be involved in 70% of crypto crimes by 2026. Ryan Lee, the chief analyst at Bitget Research, raised concerns about the use of AI-backed voice impersonators, which enable scammers to pose as relatives and request money from victims.
Another potential issue is the use of deep fakes to bypass Know Your Customer (KYC) measures and gain unauthorized access to users’ funds. Lee emphasized the importance of exchanges focusing on the “Proof of Life” features of their KYC systems to prevent such incidents.
Bitget reassures its users that it employs advanced AI solutions to quickly identify and prevent deep fake usage. However, the increasing prevalence of deep fake scams highlights the urgent need for proactive measures to protect the crypto community from substantial financial losses.