AI deepfake tool on ‘new level’ at bypassing crypto exchange KYC: Report

A new AI-powered deepfake tool called ProKYC that allows nefarious actors to bypass high-level Know Your Customer (KYC) measures on crypto exchanges demonstrates a “new level of sophistication” in crypto fraud, cybersecurity firm Cato Networks said.

In an Oct. 9 report, Cato Networks’ chief security strategist Etay Maor said the new AI tool represents a significant step up from the old-fashioned methods cybercriminals used to beat two-factor authentication and KYC.

Instead of purchasing forged ID documents on the dark web, AI-powered tools allow fraudsters to spin brand-new identities out of thin air.

Cato said the new AI tool had been customized specifically to target crypto exchanges and financial firms whose KYC protocols include matching webcam pictures of a new user’s face to their government-issued ID document such as a passport and or a driver’s license.

A video provided by ProKYC demonstrated how the tool can generate fake ID documents and accompanying deepfake videos to pass the facial recognition challenges used by one of the world’s largest crypto exchanges.

In the video, the user creates an AI-generated face and integrates the deepfake image into a template of an Australian passport.

Next, the ProKYC tool creates deepfake an accompanying video and image of the AI-generated person, used to successfully bypass the KYC protocols on the Dubai-based crypto exchange Bybit.
KYC

Cato said that with AI-powered tools like ProKYC, threat actors are now far more capable of creating new accounts on crypto exchanges, a practice known as New Account Fraud (NAF).

The ProKYC website offers a package with a camera, virtual emulator, facial animation, fingerprints, and verification photo generation for $629 as part of an annual subscription. Outside of crypto exchanges, it also claims to be capable of bypassing KYC measures for payment platforms Stripe and Revolut, among others.