The cryptocurrency industry is facing a growing threat from deepfake scams, with Coinbase warning about the increasing prevalence of these fake AI images and videos. This alert comes in the wake of the recent conviction of former US President Donald Trump, which has seen a surge in the use of deepfakes to spread fake news and misinformation.

Following Trump's conviction, followers of the former president unleashed a wave of AI-generated images depicting him as a victim of a conspiracy. These deepfakes were promoted on social media platforms, highlighting the widespread use of this tactic to influence perception and disseminate fake news. Coinbase's Chief Information Security Officer (CISO), Jeff Lunglhofer, has expressed concerns about the increasing complexity and frequency of deepfakes, particularly on platforms like YouTube where content does not trigger security alarms.

Deepfake Scams Target Crypto Executives

Lunglhofer emphasized that the new development in AI technology, deepfakes, poses a significant threat to the crypto industry. He cited examples of videos mimicking real-life images of crypto CEOs, such as Coinbase's Brian Armstrong and Ripple's Brad Garlinghouse, used in advertising fake token giveaways. These deepfakes can be very convincing, making it difficult to differentiate between illegitimate and genuine content.

Current deepfake technology is becoming more sophisticated, and this means that more convincing scams can be expected and may be difficult to detect. Lunglhofer stressed that alertness alone is insufficient to deal with these dangers and suggested implementing further safeguards for the security of assets and transactions.

Enhancing Security in Crypto Transactions

Lunglhofer called for stricter security measures in the crypto industry, which involves significant risks in its transactions and services. He advised employing facilities like the vault and multi-sig signing protocol that brings in a cooling off period before one can transact large value money. This extra layer of protection could help reduce erratic behavior that results in significant losses of funds.

For small and routine purchases, Lunglhofer recommended the use of passkeys, which produce a security token for a given user device that cannot be copied or switched. This method is more secure than simple SMS-based authentication, which he said is easy to hack into and was never designed to provide security in the first place.