Bitget Research Predicts $25 Billion Loss in Crypto Sector from Deep Fakes in 2024

Jimmy Aki
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In a report released on June 27, the research team at Bitget exchange revealed that deep fake scams is fueling a major increase in cryptocurrency losses. They projected that scams involving deepfakes could lead to a loss of over $25 billion in 2024.

Deep Fake Scam Led to $6.3B Crypto Loss in Q1

Bitget’s latest research on deep fake scams revealed that the first quarter (Q1) 2024 saw countries like the United States, Germany, China, Ukraine, Vietnam, and the United Kingdom reporting the highest incidence of detected deep fakes. This reflects a sharp 217% surge compared to Q1 2023 within the crypto industry.

During this period, deep fake scams contributed to a staggering loss of about $6.3 billion in the cryptocurrency sector alone, which has driven the research team to project these losses to escalate to as much as $10 billion per quarter by 2025.

Bitget
Excerpt of Bitget deep fake scam projection

According to Bitget, the primary modes of crypto losses attributed to deep fakes include fraudulent projects, phishing schemes, and Ponzi schemes, all of which exploit the trust and investment naivety of cryptocurrency investors.

A deepfake refers to manipulated videos, audio recordings, or images that use artificial intelligence to alter a person’s appearance or voice, often with the intent to deceive.

These scams typically involve impersonating influential figures to create false credibility and inflate project valuations, leading unsuspecting investors to make large financial commitments without conducting adequate due diligence due to “trust.”

Bitget’s latest insights on deep fake scams are propelled by its recent collaboration with Sumsub, a leading AI-powered deepfake detection technology, on June 4, 2024.

The partnership aimed to protect Bitget’s extensive user base of 25 million worldwide with Sumsub’s impressive tools. This includes identity verification, facial biometrics, non-documentary verification, and database validation, which have achieved 99% accuracy in detecting and preventing deepfake-related fraud.

Deep Fake Scam Growth Coincides with Bitget’s Projection

The concern surrounding deepfakes is well-founded due to their ability to deceive security measures and expose users to financial risks. These sophisticated identity frauds can lead to stolen identities, drained bank accounts, and eroded trust within the cryptocurrency ecosystem.

Earlier in the year, Microstrategy CEO Michael Saylor warned of deepfake Bitcoin scams that falsely portrayed him and his company with the claim of free Bitcoin giveaways. He also reported that his team often removed several AI-generated fake videos of him that were used to promote fraudulent Bitcoin schemes.

In a recent incident reported by local media, South China Morning Post, a finance worker in Hong Kong fell victim to deepfake technology during a video call, transferring over $25 million to fraudsters posing as colleagues. This illustrates how convincingly these technologies can impersonate trusted individuals to perpetrate financial fraud.

A local media, China Daily, China, also reported that a female financial employee transferred 1.86 million yuan ($262,000) to a fraudster’s account after a video call with a deepfake impersonating her boss.

These incidents coincided with Bitget’s projections on deep fake scams and the need for heightened security measures.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.