SA’s Top Crypto Firm Is On High Alert After AI Deepfake Scam Targets Staff

Luno, a licensed financial services provider in South Africa and a major crypto investment app, is on high alert after a recent deepfake scam targeted one of its employees. The incident exemplifies the growing threat of AI-powered impersonation fraud in the country, particularly within the bubbly cryptocurrency sector, as Luno positions itself on the frontlines of the battle.

The company recently averted a major crisis when a staff member was targeted with a deepfake audio message on WhatsApp, purportedly from a senior executive, information it shared with WT revealed. While the authenticity of the realistic but mimicked voice and the instruction was enough to raise suspicion and it was ultimately flagged, the incident serves as a reminder of the sophistication of these attacks.

Deepfakes, highly convincing synthetic media generated by artificial intelligence, are becoming increasingly sophisticated and are being exploited by criminals to defraud individuals and businesses. The potential financial losses are staggering. A recent case in Hong Kong saw an employee transfer USD 26 M after being duped by deepfakes of colleagues over a video call, including the company’s chief financial officer.

Notably, the allure of tech billionaire Elon Musk as a public figure has made him a favourite anchor for fraudsters. In the wake of SpaceX’s Starship launch, YouTube was flooded with deepfake videos of the tech billionaire promising exorbitant returns on fake crypto investments. This highlights the speed and scale at which these scams can proliferate.

Luno, which offers a platform for buying, storing, and learning about cryptocurrencies like Bitcoin and Ethereum to millions of users across 40 countries, has recognised the growing threat posed by deepfakes. The company’s business model, which involves handling digital assets, makes it a particularly attractive target for fraudsters.

“Deep fakes pose a material risk in the crypto sector,” warns Johan Hetzel, global head of compliance and anti-financial crime at Luno. Unlike traditional finance, where fraudsters can distribute money between various financial institutions, the blockchain, the technology underpinning cryptocurrencies, allows crypto service providers to trace transactions beyond their customer base. However, the psychological impact of deepfakes, which can make it difficult to discern reality from fiction, remains a significant challenge.

To combat this threat, Luno has established a dedicated team to monitor social media and websites for fraudulent impersonations of the company. Over the past year, the company has proactively identified and removed over 2,000 fake social media pages and nearly 500 fraudulent websites that misused its brand. This aggressive stance has resulted in takedown success rates of 98% and 87.6% respectively, the company claims.

“Fraud is a concern for crypto service providers, as well as across the financial services industry in South Africa,” says Hetzel. To protect users, Luno emphasises the importance of vigilance. “If it’s too good to be true, it probably is,” he cautions. The company encourages users to verify the authenticity of any communication and to avoid rushing into decisions.

Blockchain technology, while instrumental in enhancing transparency in the crypto ecosystem, also holds promise in combating deepfakes. Its decentralised nature and focus on security can be leveraged to authenticate digital content. This has already been demonstrated with non-fungible tokens (NFTs), where the blockchain records the creator and owner, making it difficult to counterfeit.

Nevertheless, the battle against deepfake fraud is likely to be an ongoing one given the acceleration in the potency of AI advancement, Luno’s experience serves as a cautionary tale for the broader industry. The company’s proactive approach to protecting its users is a commendable step, but it is clear that a collaborative effort is needed to combat this evolving threat.

Featured Image Credits: AARP