Crypto losses due to deep fake scams are projected to surpass $25 billion in 2024, more than doubling last year’s losses, according to Bitget Research.
In a June 27 report, Bitget noted a 245% increase in deep fakes worldwide, based on earlier Sumsub research data.
The report identified China, Germany, Ukraine, the United States, Vietnam, and the United Kingdom as having the highest occurrences of deep fakes in the first quarter of 2024.
The crypto industry alone saw a 217% increase in deep fake incidents compared to Q1 2023.
Bitget reported that the rise in deep fakes led to $6.3 billion in crypto losses in the first quarter, with expectations of losses reaching $10 billion per quarter by 2025.
“Deepfakes are moving into the crypto sector in force, and there is little we can do to stop them without proper education and awareness,” Bitget CEO Gracy Chen told Cointelegraph.
Interestingly, deep fake fraudsters have not significantly changed their tactics over the years.
Most crypto losses occur through fake projects, phishing attacks, and Ponzi schemes, using deep fake technology to gain the trust of cryptocurrency investors.
These methods have accounted for more than half of all deep fake-related crypto losses over the past two years.
READ MORE: DFX Labs Nears Full Operational License in Hong Kong Amid Regulatory Push for Global Crypto Startups
“By impersonating influential figures, these schemes create the illusion of credibility and substantial project capitalization, thereby receiving large investments from victims without thorough due diligence,” said Bitget Research.
MicroStrategy executive chairman Michael Saylor has been a frequent target for fraudsters.
In January, Saylor mentioned his team removes around 80 AI-generated fake videos of him daily, typically promoting Bitcoin-related scams.
Bitget also noted the use of deep fakes in cyber extortion, identity fraud, and market manipulation, though these represent a smaller share of crypto scams.
For example, a fake statement from an influencer might be used to manipulate token prices.
Bitget predicts that without effective measures, deep fakes could be used in 70% of crypto crimes by 2026.
“Criminals are increasingly employing fake photos, videos, and audio to exert a stronger influence over their victims,” Bitget Research chief analyst Ryan Lee told Cointelegraph.
Lee highlighted concerns over AI-backed voice impersonators and deep fakes that circumvent Know Your Customer (KYC) measures to access user funds.
He emphasized the importance of “Proof of Life” features in KYC systems to prevent such fraud.
To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.
