Deepfakes Fuel 40% of 2024 Crypto Frauds, Losses Surge 24%

AI-generated deepfakes of government officials, billionaires, and celebrities accounted for 40% of high-value crypto frauds in 2024, according to a report by Bitget. This alarming trend highlights the growing sophistication of fraudulent activities in the cryptocurrency space, leveraging advanced technologies to deceive victims.

The report revealed that crypto scam losses reached $4.6 billion in 2024, marking a 24% increase from the previous year. This significant rise underscores the escalating threat posed by crypto fraud, which has evolved to exploit trust and psychology as much as technology. The report emphasized that scams are becoming more personalized, believable, and harder to detect, ranging from wallet takeovers to multimillion-dollar frauds.

One of the most frequent deepfake scams featured Tesla CEO Elon Musk, who was impersonated to promote fraudulent investment or giveaway schemes. Other uses of deepfakes include bypassing know-your-customer verification, creating virtual identities to lead investment scams, and conducting fake Zoom phishing attacks. These scams often involve impersonating executives, experts, and journalists to gain the victim's trust and access their private crypto keys.

The report also highlighted the use of deepfake tools to generate video and audio content, tricking victims into joining fraudulent video calls. These scams are not new, but the rapid advancement of artificial intelligence has made deepfakes increasingly realistic, making them harder to detect. The report noted that while deepfake pornography is now protected by law, deepfakes in general are still not prohibited.

In addition to deepfakes, social engineering and modern Ponzi schemes ranked as the second and third most dangerous scams. Social engineering scams exploit the psychology of victims through low-tech but highly effective methods, such as the pig butcher scam, where attackers develop a relationship with the victim solely to scam them. Modern Ponzi schemes have undergone a digital evolution, disguising themselves as new concepts like DeFi, NFTs, and GameFi, and using deepfakes to forge endorsements from celebrities to boost credibility.

The report concluded that the landscape of crypto scams has changed dramatically in recent years. Five years ago, avoiding scams meant not clicking suspicious links, but today, it means not trusting one's own eyes. The rise of AI has revolutionized the scamming industry, making it faster, cheaper, and harder to detect, posing a significant threat to the crypto community.