Deepfake Technology Emerges as a Growing Threat to Crypto Firms and Influencers

By: Isha Das

In an era increasingly dominated by artificial intelligence, the proliferation of deepfake technology has emerged as a significant threat, adversely impacting both the crypto industry and public figures alike. Recent legal action brought by Megan Thee Stallion against an influencer in Florida highlights the personal toll of such technology. The rapper cited instances of targeted bullying, emotional abuse, and AI deepfake pornography, illustrating the severe personal impact and harassment facilitated by deepfake technology.

Moreover, a comprehensive survey conducted by forensic services firm Regula has shed light on the significant rise in audio and video deepfake fraud within the cryptocurrency sector. According to the findings, over half of the crypto firms surveyed reported encountering such frauds, making it one of the most affected industries. Specifically, 57% of these companies fell prey to audio fraud, while 53% experienced fake video scams. The survey encompassed 575 businesses across sectors such as financial services, technology, and law enforcement, underscoring a 49% average impact across industries.

The cryptocurrency industry has demonstrated a marked vulnerability to synthetic identity fraud, with fraudulent actors posing as legitimate individuals using deepfake methods. This threat has led to substantial financial implications, with the average loss to deepfake fraud in the sector amounting to $440,116 this year. Despite falling slightly below the overall average loss of $450,000 across sectors, crypto businesses are still ranked among the top three in terms of financial losses, following financial services and telecommunications.

The situation is further exacerbated by the increasing sophistication of these attacks, exemplified by a case involving a user from the crypto exchange OKX, who reportedly lost $2 million in a deepfake-related cryptocurrency scam. This growing trend has prompted crypto firms to prioritize addressing deepfake threats, with 69% considering such scams significant risks, leading to proactive measures to safeguard their interests and users. This industry-wide acknowledgment of deepfakes' potential for harm emphasizes the urgent need for robust defenses against such cyber threats.