Deepfake Scams in Crypto: What You Need to Know
Feb 01, 2024What are deepfakes?
Deepfakes are the synthetic manipulation of anyone’s likeness in any medium for the purpose of tricking people into believing something false or stealing their money. Fakes of objects, documents or anything else have been around since the beginning of time. As soon as photographs came into existence, “fake images” emerged, so fakes are obviously not a new thing. However, the proliferation of artificial intelligence (AI) and machine learning makes fakes so good that people can no longer tell the difference between real and fake. Unfortunately, deepfakes have become synonymous with crypto fraud and scams.
Wikipedia defines deepfakes like this, “Synthetic media that have been digitally manipulated to replace one person's likeness convincingly with that of another. Deepfakes are the manipulation of facial appearance through deep generative methods.”
Deep fake = deceptive power
Michael Saylor’s deepfake Bitcoin problem
MicroStrategy executive chairman, Michael Saylor, is one of the biggest Bitcoin advocates with his company continuing to stockpile billions worth of Bitcoin. He tweeted a warning about deep fake video creation, stating his team works to take down about 80 deepfake videos on a daily basis.
@saylor, “There is no risk-free way to double your #bitcoin, and @MicroStrategy doesn't give away $BTC to those who scan a barcode. My team takes down about 80 fake AI-generated @YouTube videos every day, but the scammers keep launching more. Don't trust, verify.”
The double-your-money scam is the most obvious fraud of all time, so it baffles me anyone falls for this. It goes something like, “Send us 1 BTC and we’ll send you 2 BTC back.” Seriously? I’m going to send my crypto to someone first and they are so generous they’ll go broke doubling everyone's money.
Key Takeaway
The good news is common sense is a secret weapon you already have. The money scams are generally easy to spot because they don’t make economic sense.
Avoid crypto scams.
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Solana co-founder deepfake
Anatoly Yakovenko, co-founder of Solana, was featured in a deepfake, YouTube-sponsored ad video. In the video, Yakovenko declares an “historic day” for Solana with an airdrop giveaway. I saw this pop up while clicking on another crypto video, but I wasn’t quick enough on my feet to record the video for education purposes.
I was blown away by the quality of the Anatoly deepfake in the sense there were no video or audio glitches. The voice was consistent and appeared real, but the messaging was the obvious clue it was a crypto AI deepfake.
Solana is NOT giving away airdrop tokens and there never was an airdrop. Solana launched in 2020 so its way past an airdrop timeline anyway. Crypto education is the key to increasing your scam and fraud intelligence. The more you understand the dynamics of the crypto space and the personalities of the founders, VC investors and influencers as well as the MO of scammers, the easier it is to spot a scam and avoid getting rekt.
Why deepfakes are so dangerous to crypto
Even though it’s hard for me to understand how people get duped on crypto deepfake scams, I also realize there are two explanations:
Lack of education
It’s as simple as that and in case you haven't noticed that’s an ongoing theme. As Benjamin Franklin said, “An investment in knowledge pays the best interest” and as I say, “Information about crypto is more valuable than crypto itself.” There’s a direct correlation between crypto knowledge and avoiding scams. The more you know the less likely you are to get scammed.
Greed psychology
The desire for quick riches can be so strong it overtakes the judgment process in the frontal cortex. It doesn’t matter how obvious the scam because people become temporarily blind while convincing themselves to participate. It’s like an uncontrollable force. Lack of financial savviness inside and outside of crypto is also a root cause for getting dupped.
Key Takeaway
Financial savviness comes from education and experience and it’s not baked into the US education system, for example. You don’t get savvy overnight it takes practice. Sometimes getting dupped is a good thing since your scam awareness skyrockets.
How to spot deepfake crypto scams
The main purpose of deepfake crypto scam videos is to steal your money. The same tactics used in phishing attempts like deals “too good to be true” and urgency are repeated in deepfakes. Once you get good at spotting scams the medium of delivery doesn’t matter as much. It also helps to watch examples of deepfake videos.
David Schwed, COO of Halborn, said watch for unnatural eye blinking because images of people are sometimes used to make videos and eye blinking has to be simulated. He goes on to say, “If a video of CZ is released, claiming withdrawals will be halted within the hour, are you going to immediately withdraw your funds, or spend hours trying to figure out if the message is real?”
This type of crypto deepfake is far more dangerous as a malicious attack that could move markets, causing panic and massive price drops. Bad actors could cash in on greater profits from shorting and other strategies or conversely direct a pump and dump scheme.
The Guardian added this about spotting deepfakes, “Poor-quality deepfakes are easier to spot. The lip synching might be bad, or the skin tone patchy. There can be flickering around the edges of transposed faces. And fine details, such as hair, are particularly hard for deepfakes to render well, especially where strands are visible on the fringe. Badly rendered jewelry and teeth can also be a giveaway, as can strange lighting effects, such as inconsistent illumination and reflections on the iris.”
Deepfakes will eventually be undetectable by regular users so detection technology developers will be in a foot race with scammers. Tracking the impact of deepfakes will be an ongoing process so stay tuned and read everything you can on this topic. Increase your fraud and scam intelligence inside and outside crypto. You’ll need it.
