Crypto Scammers Using AI Deepfakes to Spoof KYC Verification on Exchanges, Binance Security Chief Says

Deepfakes are artificially generated photos or videos designed to can convincingly replicate the voice as well as facial features of an individual.

Written by Radhika Parashar, Edited by David Delima | Updated: 24 May 2023 15:13 IST

Crypto Scammers Using AI Deepfakes to Spoof KYC Verification on Exchanges, Binance Security Chief Says

Photo Credit: Unsplash/ @sharon Mccutcheon

A whopping $103 million (roughly Rs. 840 crore) was stolen in crypto exploits last month

Highlights

Crypto exchanges are at risk of being deceived by deepfakes
Deepfake pictures or videos can bypass facial and voice recognition
A Binance executive has sounded an alert about AI deepfakes

Crypto scammers and hackers are finding newer ways to penetrate safety measures, even as the crypto industry accelerates attempts to add layers of advanced security to various platforms. Hackers and scammers are now tapping into AI deepfakes in order to breach the security of crypto exchanges and Web3 related firms. Using deepfake AI, notorious elements aim to bypass the identification criteria established by platforms, Binance Chief Security Officer Jimmy Su said in a recent interview

Deepfakes are artificially generated photos or videos that designed to convincingly replicate the voice as well as facial features and expressions of an individual — living or deceased. Artificial intelligence (AI) and machine learning (ML) tools are utilised to create deepfakes with realistic graphics.

If scammers succeed in creating deepfakes of crypto investors, it increases their chances of bypassing the security of crypto platforms and stealing user funds. “The hacker will look for a normal picture of the victim online somewhere. Based on that, using deep fake tools, they're able to produce videos to do the bypass. Some of the verification requires the user, for example, to blink their left eye or look to the left or to the right, look up or look down. The deep fakes are advanced enough today that they can actually execute those commands,” Su told CoinTelegraph .

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For some months now, players in the crypto sector have been highlighting the growing threat that AI-generated deepfakes pose to uninformed and unsuspecting victims. In February 2023, a deepfake video of Binance CEO Changpeng Zhao surfaced on social media. In that clip, an artificially generated Zhao can be heard calling people to exclusively trade crypto with them.

Deep fake AI poses a serious threat to humankind, and it's no longer just a far-fetched idea. I recently came across a video featuring a deep fake of @cz_binance , and it's scarily convincing. pic.twitter.com/BRCN7KaDgq
— DigitalMicropreneur.eth (@rbkasr) February 24, 2023

A similar deepfake video of Elon Musk sharing misleading crypto investment advice was also spotted on social media earlier this month.

Beware of deepfake videos of Elon Musk. These are being used in various crypto scams on Youtube. :warning:
pic.twitter.com/nVsZPJipoT
— DogeDesigner (@cb_doge) May 13, 2023

Since these deepfake videos are highly appealing, many people might not be able to spot some warning signs that they are deepfakes. In the coming times, Su predicts that AI will be able to detect the uneven parts of deepfakes and will improve in quality.

“When we look at those videos, there are certain parts of it we can detect with the human eye. for example, when the user is required to turn their head to the side. AI will overcome [them] over time. So, it's not something that we can always rely on. Even if we can control our own videos, there are videos out there that are not owned by us. So, one thing, again, is user education,” Su said in the interview.

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A recent report from blockchain research firm CertiK estimates that a whopping $103 million (roughly Rs. 840 crore) was stolen in crypto exploits this year in April. Exit scams and flash loans emerged as the largest source of stolen funds in crypto crimes. In the last four months of 2023, CertiK estimates $429.7 million (roughly Rs. 3,510 crore) were stolen by crypto scammers and hackers.

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Further reading: Cryptocurrency, Crypto Scams, Deepfake

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More