Deepfakes have significantly impacted the financial sector, with substantial losses amounting to $79.1 billion since 2022.
This sophisticated technique, involving AI and machine learning to create deceptive videos and images, is increasingly threatening the crypto industry. Bitget Research highlights the severe risks, projecting that deepfake scams could cost the crypto industry up to $25 billion in 2024, a figure that more than doubles the losses from the previous year.
Deepfake technology is used to create realistic impersonations of influential figures, tricking victims into financial scams. According to Bitget’s June 27 report, deepfake incidents are expected to increase by 245% globally in 2024.
The report identifies China, the United States, Germany, Vietnam, and Ukraine as the most affected regions in Q1 2024. Notably, the crypto sector experienced a 217% surge in deepfake scams compared to the first quarter of 2023, resulting in $6.3 billion in crypto losses in Q1 2024 alone.
Gracy Chen, Bitget’s CEO, emphasizes the urgent need for education and awareness to combat deepfakes, which have deeply infiltrated the crypto industry.
Many losses are attributed to fake projects, phishing schemes, and Ponzi schemes, where scammers use deepfake technology to create a false sense of legitimacy and attract investors. Over the past two years, these types of scams have constituted over half of all deepfake-related crypto thefts.
The use of deepfakes in crypto scams involves impersonating well-known personalities to lend credibility to fraudulent projects. For example, Michael Saylor reported his team destroying up to 80 fake AI-generated videos of him daily, which were used to promote Bitcoin scams.
Besides financial scams, deepfakes are also utilized for blackmail, identity fraud, and market manipulation, though these are less common.
Looking ahead, experts are concerned that deepfakes will become even more prevalent in crypto crimes as technology advances. By 2026, Bitget predicts deepfakes could be involved in 70% of crypto crimes.
Ryan Lee, a Bitget Research analyst, notes the increasing sophistication of fake videos, images, and audio. Effective countermeasures like “Proof of Life,” requiring live actions to verify users, are recommended to enhance security. Despite these efforts, the fight against deepfakes is expected to intensify, necessitating continuous vigilance and education.
