A network security company raised alarms about criminals using an AI tool while dealing with cryptocurrency exchanges.
Cato Networks revealed that bad actors are selling a deepfake tool in underground markets that helps users bypass identity verification processes on these platforms.
Deepfake technology used for fraud
Cato Networks explains that this tool isn’t meant for hacking into existing accounts but is designed to create fake accounts for money laundering and other fraudulent activities.
The report highlights that creating verified but synthetic accounts allows criminals to conduct money laundering operations, set up mule accounts, and engage in various forms of fraud.
According to the American Association of Retired Persons, new account fraud led to losses exceeding $5.3 billion in 2023, a big increase from $3.9 billion in 2022.
AI can generate fake IDs
Criminals start by generating fake credentials and images using AI-rendering websites.
They then use the deepfake tool to forge passports and create videos that can trick a crypto exchange’s facial recognition systems.
After these steps, they upload the fake government ID to create a new verified account on the exchange.
The process involves connecting the deepfake video as if it were the live feed from the computer’s camera during the facial recognition check.
Crypto exchange security is gone?
Cato Networks even shared a video demonstrating how quickly this tool can be used to set up a verified account on a crypto exchange, often in just minutes.
The firm urges exchanges to upgrade their security measures to defend against these new types of account fraud.
While AI technology is often praised in the media, Cato Networks points out that criminals have been honing their use of deepfake technologies for some time now.
To protect themselves from these AI threats, organizations are advised to gather threat intelligence through various means, including human intelligence and open-source information, while keeping up with the latest trends in cybercrime.
