AI Deepfakes Responsible For 40% Of $4.6B Lost To Crypto Scams Last Year, Report Says

Some $4.6 billion was lost to cryptocurrency scams in 2024, according to a joint report from  cryptocurrency exchange Bitget and cryptocurrency-focused security firms SlowMist and Elliptic released last week. Deepfakes were the most used tactic, accounting for "nearly 40% of high value fraud," the report said.

Using deepfakes, scammers created the illusion of official authority for scam projects, the firms said. They cited deepfaked videos of Singapore Prime Minister Lee Hsien Loong and Deputy Prime Minister Lawrence Wong endorsing supposed "government-endorsed crypto investment" platforms as examples. The report also said Tesla TSLA CEO Elon Musk was regularly featured in fraudulent giveaway schemes.

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Beyond impersonating public figures the report said deepfakes are used to bypass know your customer verification systems to steal customer funds, create virtual identities as covers for investment fraud and launch phishing attacks through fake video meeting platforms that implant backdoors in the computers of targets.

"Five years ago, avoiding scams meant ‘don’t click suspicious links.' Today, it’s ‘don’t trust your own eyes,'" the report said.

Meanwhile, AI is also being leveraged to make more traditional scams, like Ponzi and pyramid schemes, more sophisticated. Using face-swapping and deepfake technology, scammers are able to fake images and videos to bolster confidence in the schemes. The report cited a February scheme that saw scammers hijack the X account of Tanzanian billionaire Mohammed Dewji to promote a fake Tanzania token using deepfake videos. The project raised over $1.4 million in the first 24 hours.

"The biggest threat to crypto today isn't volatility—it's deception," Bitget CEO Gracy Chen said in a statement. "AI has made scams faster, cheaper, and harder to detect."

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With the pace of AI advancement likely to continue to accelerate, the current dominance of AI-based cryptocurrency scams promises to be the new reality, making it necessary for projects and individuals to develop countermeasures.

Some suggestions in the report include establishing a single platform for information sharing and using on-chain signatures for easy verification.

The report also warned users against blindly trusting familiar faces and voices, urging them to verify information across multiple platforms before acting. 

Other tips included being skeptical of unsolicited contact, not running code or installing files from unknown sources, bookmarking official sites, and using scam detection plug-ins.

The scourge of deepfakes is not limited to the cryptocurrency space. President Donald Trump in May signed the Take It Down Act, which criminalizes deepfake pornography and requires tech firms to remove them upon request.

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