Binance Warns: AI Could Hack Cryptos KYC Verification

Binance Warns: AI Could Hack Cryptos KYC Verification


Binance warns of the dangers of deepfakes, which are spreading through AI software and can compromise KYC verification systems, putting users’ data and funds at risk in the crypto community.

Artificial intelligence has a love-hate relationship with cryptocurrency and blockchain tech technology: although the advent of ChatGPT has brought awareness of the full potential of Artificial Intelligence (AI) in the world of trading, big data, and smart contracts, there are still some dangers that the cryptocurrency community has to  distance itself from.

In particular, Binance Crypto exchange thinks that through deepfakes, some malicious users are able to evade KYC verification systems by scamming corporations and investors.

Cryptocurrency alert: artificial intelligence and deepfakes

1st “red flag” in the digital currency world regarding the much-loved artificial intelligence technology.

Reports by Jimmy Su, head of safety at Binance Crypto exchange, the following wave of scams for the industry will be spearheaded by deepfakes, which are spreading thanks to Artificial Intelligence (AI) software.

Through machine learning, deepfakes are able to recreate highly plausible (but fake) images or videos from real content on networks.

In particular, these fake versions highly realistically recreate features, movements of a face, body, or even faithfully reproduce a particular voice.

As a result, cyber-criminals are impersonating some of the prominent figures in the cryptocurrency community by carrying out well-thought-out scams.

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Despite the fact that this technique can be honestly and advantageously applied in daily life and work, bringing advantages to those who use it, it can be both detrimental to cryptocurrency corporations and investors.

Last August, Binance‘s communications manager Patrick Hillmann warned that a group of attackers was recreating a deepfake version of him from video interviews on the web and from his Television appearances. 

The “deepfake” version of Hillmann was then used in online meetings on Zoom with cryptocurrency project teams who were promised the price of crypto tokens in exchange for payment.

The only way to combat the spread of fraud of this kind, reports by Jimmy Su, is to educate users by pointing out the fallacies that artificial intelligence presents in recreating content.

Binance Crypto exchange believes artificial intelligence can compromise the KYC verification systems of cryptocurrency projects

The cryptocurrency exchange Binance Crypto exchange and its chief security officer believe that artificial intelligence and deepfakes can compromise KYC verification systems by putting users’ data and funds at risk. 

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This is not specific to Binance Crypto exchange, where there are sophisticated verification automations, but more  traditionally to all crypto-themed projects where there is a must verify the identity of individuals through the classic “Know your customer” (KYC) procedure.

The modus operandi for the evasion of these systems is the following: 1st they search online for some photos of the victim, then thanks to Artificial Intelligence (AI) tools they start to produce highly realistic videos of which one can potentially not notice the fake characters.

Jimmy Su argues that deepfakes are spreading mainly for the purpose of implementing scams, especially for cryptocurrency enthusiast communities. 

Nonetheless, he believes at the same time that the overall quality of the fake videos are not is still such that they can fool human verification.

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Binance Crypto exchange intends to publish a series of blog posts to inform users about management of danger methods.

In the 1st content published by the exchange, it was indicated that the company uses artificial intelligence and machine learning algorithms to detect anomalous login patterns and transactions on the platform.

Hence, it is possible to exploit Artificial Intelligence (AI) for non-fraudulent objectives, but there is a must be careful about the development of this technology because it  can potentially create whole lot of damage in the cryptocurrency sector.

A Web 3.0 security expert, in reference to deepfakes, thinks that they may be misused in Ledger‘s new “Recover” update, where users can request the hardware building company to have the seed phrase sent to them if they lose it, after verifying their identity through KYC verification.

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Sometimes the Artificial Intelligence (AI) narrative and the appeal it has on the public are exploited to attract attention and generate trading volumes on crypto tokens that do not essentially have fundamentals behind them, but only good management of communication and marketing programs.

Most of these use within their names words such as “GPT,” “AI,” “CHATBOT,” sometimes mixing them with the brand name of some famous memecoin.

Nevertheless, the artificial intelligence tendency is allowing serious projects such as Singularity Net, The Graph, Render Crypto Token, Fetch.ai, and Injective to increase their capitalization.

In this regard, the “ Artificial Intelligence (AI) and Big Data” section of digital currencies on CoinMarketCap has surpassed the $5 billion mark, with a whole lot of increase from the beginning of 2023.

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It is probably still as well early to see a true explosion of the artificial intelligence tendency, given and seeing as that there are few truly applied use cases in the cryptocurrency world excluding those where scams are attempted.

ChatBots, automation of trading systems, and big data detection are certainly important and will be one of the drivers by which the following positive  tendency markets will be undertaken.

Nonetheless, we still have a long way to go and must build more efficient products for a real revolution.

Meanwhile,  we can have fun creating a deepfake video with the face of CZ (CEO of Binance) in which the delisting of your best friend’s favorite cryptocurrency is announced, following that sending him the fake content and seeing how he reacts. 

Nonetheless, be careful to delimit the prank in private channels without creating FUD within the community.



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