In a recent study conducted by Regula, it has been revealed that the crypto sector is facing a significant challenge with deepfake fraud surpassing traditional document fraud in terms of prevalence. This marks the crypto industry as the only surveyed sector where deepfake fraud is more prevalent than other forms of fraud. The study also highlights the significant losses that crypto companies are experiencing due to these fraudulent activities.
According to the findings, 57% of crypto companies have reported incidents of audio deepfake fraud, while only 45% have encountered fake or modified document fraud. Additionally, 53% of crypto firms have faced video deepfake fraud, emphasizing the growing concern within the industry. This shift in focus towards leveraging advanced technologies by fraudsters poses a unique challenge to the security defenses of crypto organizations.
The average loss incurred by crypto companies from advanced fraud techniques such as deepfakes is around $440,000. Surprisingly, 37% of companies are losing even more, with losses exceeding $500,000 each. To combat these threats, crypto organizations have adopted unique defense strategies, such as multi-factor authentication, biometric facial recognition, and digital document verification combined with liveness checks.
Interestingly, the study also reveals that crypto companies prioritize live video interviews as their top fraud prevention strategy, with 90% of respondents favoring this approach. This preference sets them apart from global trends, where a mix of biometric verification and online document verification remains the dominant choice, supported by 93% of respondents.
Furthermore, the crypto sector shows a higher demand for stronger oversight of deepfake fraud, with 39% of companies advocating for the establishment of a dedicated regulatory body to monitor and combat deepfake-related threats. This is well above the global average of 29%, indicating the industry’s heightened awareness of the dangers posed by deepfake fraud.
In response to these evolving threats, Henry Patishman, EVP of Identity Verification Solutions at Regula, emphasizes the need for a reevaluation of identity verification processes. He highlights the importance of real-time liveness detection and robust, multi-layered security measures not only as an onboarding tool but also as critical defense measures against deepfake fraud.
Overall, the crypto industry is facing a new frontier in fraud, where traditional threats are being surpassed by advanced technologies like deepfakes. As companies continue to adapt to these challenges, the emphasis on strengthening security measures and enhancing fraud prevention strategies will be crucial in safeguarding against these evolving threats.