Deepfakes, manipulated media created using AI and machine learning, have emerged as a significant threat to financial security, particularly in the cryptocurrency industry. Since 2022, these deceptive techniques have resulted in staggering financial losses, estimated at up to $79.1 billion globally. This trend underscores the growing menace posed by deepfakes within the crypto sector.
Bitget Research has issued a stark warning, projecting that deepfake scams could cost the crypto industry $25 billion in 2024 alone, more than doubling the losses incurred in the previous year. These scams involve creating counterfeit videos and images that impersonate influential figures, deceiving victims into investing in fraudulent projects, or sending money under false pretenses.
In its June 27 report, Bitget highlighted a projected 245% increase in deepfake incidents worldwide by 2024. This surge has already been felt, with a 217% rise in deepfake-related scams in the crypto world during the first quarter of 2024 alone, resulting in approximately $6.3 billion in losses.
Deepfake Threats in Cryptocurrency: $79.1B Global Losses Forecast, $25B Projected for 2024
Gracy Chen, CEO of Bitget, emphasized the profound impact of deepfakes on the crypto sector, stressing the importance of education and awareness to combat this growing threat. Most losses stem from scams involving fake projects, phishing schemes, and Ponzi schemes, where perpetrators exploit deepfake technology to establish false credibility and lure unsuspecting investors.
The use of deepfakes extends beyond financial scams; they are also employed for blackmail, identity fraud, and market manipulation. Notably, influential personalities like Michael Saylor have been frequent targets, with scammers generating numerous fake videos to promote Bitcoin scams.
Looking ahead, experts express concerns that deepfake technology will continue to evolve, potentially being utilized in up to 70% of crypto crimes by 2026. Ryan Lee, an analyst at Bitget Research, underscores the sophistication of these scams, which increasingly include AI-powered voice manipulations and sophisticated impersonation techniques to deceive victims.
To mitigate these risks, Lee advocates for enhanced security measures such as “Proof of Life,” which verifies user authenticity through real-time actions like blinking or movement. While these measures are crucial, the ongoing advancement of deepfake technology poses a formidable challenge, necessitating vigilance and continuous adaptation within the cryptocurrency community to safeguard against emerging threats.
