A New Study Shows Alarming Rise in Deep Fake Fraud in Crypto Industry
A recent report by Sumsub reveals concerning statistics regarding the increase in deep fake fraud within the crypto industry. The study indicates that fraud tactics have become more professionalized, with 77% of crypto companies witnessing new patterns and schemes. Deep fakes, in particular, pose a significant challenge, as 70% of companies reported a rise in their use for defrauding victims.
Notably, there has been a staggering 128% increase in the use of deep fakes in the crypto industry compared to the previous year. This rise has resulted in 55% of crypto companies experiencing higher losses due to fraud, impacting both their finances and reputation.
The report highlights specific incidents, such as AI-generated profiles that successfully evaded software detection and a large-scale layering scheme involving multiple bank transfers and crypto conversions. To combat these advanced fraud methods, crypto companies are turning to advanced technical infrastructure and providers with extensive document-handling experience.
Improvement in Verification Time
Despite the rise in deep fake fraud, verification time has significantly decreased from 2022 to 2023. Europe leads with the fastest onboarding process, taking less than 30 seconds. Africa, Asia, and Latin America also witnessed impressive improvements. However, challenges arise in Proof of Address (PoA) verification due to varying document types across countries.
Crypto companies are increasingly relying on advanced anti-fraud solutions leveraging AI technology to detect deep fake artifacts, analyze document similarities, and automatically reject invalid applications. These solutions prove crucial in combating advanced fraud methods that traditional know-your-customer (KYC) providers struggle to identify.
Hot Take: The Need for Advanced Anti-Fraud Solutions in the Crypto Industry
The rise of deep fake fraud in the crypto industry calls for robust and technologically advanced solutions. As fraud tactics become more sophisticated, traditional KYC providers face challenges in identifying and preventing such fraudulent activities. The use of AI technology in anti-fraud solutions is crucial in detecting deep fakes, analyzing document templates, and ensuring the integrity of the verification process.
Crypto companies must prioritize investing in advanced technical infrastructure and partnering with experienced document-handling providers to combat the increasing threat of fraud. By doing so, they can protect their finances and reputation while maintaining a seamless user experience.
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