In recent months, the cryptocurrency industry has become a target for identity-related fraudulent activities. According to an AU10TIX report, crypto platforms accounted for 29% of global identity fraud attempts in the second quarter of 2024.
Current Fraud Statistics
In Q2 2024, crypto platforms accounted for 29% of all global identity fraud attempts, coming second only to the payments industry at 52%. Fraudsters increasingly turn to decentralized exchanges and wallets, where the anonymity of transactions attracts criminals aiming to create fake profiles and execute fraudulent schemes.
Use of Deepfakes
One of the primary methods used by fraudsters is impersonation bots, now enhanced with deepfake technology. These bots create realistic fake accounts, enabling criminals to infiltrate platforms and execute fraudulent schemes. Recent prominent targets of deepfake scams include Ethereum co-founder Vitalik Buterin, Ripple CEO Brad Garlinghouse, Tesla CEO Elon Musk, and Apple CEO Tim Cook.
Impact on the Crypto Industry
A June 2024 report from Bitget confirmed that losses from deepfake-related scams have exceeded $79 billion in the past two years, with a massive spike of 245% recorded this year. In Q2 2024, the crypto industry recorded losses amounting to $572 million from scams and hacks. Data from Chainalysis shows that overall cryptocurrency crime accounted for $24.2 billion in illicit transactions in 2023, representing 0.34% of the total crypto trading volume.
Despite improvements in security measures and a reduction in the share of illicit transactions in the crypto industry, ransomware and dark web market activity have surged in recent months. This has particularly impacted the Asia-Pacific region, where identity fraud rates rose by 24% between 2022 and 2023.
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