Regula, global developer of identity verification solutions, has been reviewing fraud trends in the Crypto industry. In this sector, deepfakes have become a threat, probably surpassing traditional document fraud.
Deepfakes can be used to spread disinformation and to promote crimes like fraud. It is currently a largely unregulated technology.
The survey finds that 57 percent of crypto companies have reported audio deepfake attacks, the highest among all surveyed sectors. Following this, 53 percent face video deepfake fraud, surpassing the 45 percent impacted by fake documents.
The study also shows that while the Crypto industry experiences an average loss of $440,000 from advanced fraud techniques like deepfakes, in terms of the most concentrated impact of the financial fall-out, 37 percent of firms lose over $500,000 per attack, with an average loss of $440,000.
Crypto organizations are not only more frequently targeted by deepfake fraud but also rely on unique defense strategies. According to the study:
• 57% rely on multi-factor authentication (MFA), for instance email token verification.
• 53% use biometric facial recognition.
• 37% leverage fingerprint biometrics, compared to a global average of 52%.
• 45% adopt digital document verification combined with liveness checks.
To combat some of the adverse impacts of cyberattacks and to address some of the weaknesses with standard practices, 90 percent of crypto firms are relying on live video interviews with document checks. A mix of biometric verification and online document verification remains the second most dominant choice, with 93 percent support.
As indicated above, only 37 percent of companies in the sector use fingerprint biometrics, trailing the global average of 52%. Gaps such as these potentially leave the industry vulnerable.
Is regulation the answer for tackling these trends? 39 percent of Crypto companies advocate for the establishment of a dedicated regulatory body to monitor and combat deepfake-related threats – well above the global average of 29 percent.
Commenting on this, Henry Patishman, Executive Vice President of Identity Verification Solutions at Regula states: “Crypto is facing a new frontier in fraud, where deepfake attacks have surpassed traditional threats in prevalence.”
He adds: “This shift calls for a reevaluation of identity verification – not just as an onboarding tool, but as a critical defense measure, emphasizing real-time liveness detection and robust, multi-layered security.”
