Identity checks on crypto exchanges at risk as AI deepfakes evolve
The rise of artificial intelligence (AI) has been subject to growing concerns over identity verification tools on cryptocurrency exchanges.
With rapidly evolving AI technology, the process of creating deepfake proofs of identity is becoming easier than ever. The concerns about AI-enabled risks in crypto have triggered some prominent industry executives to speak out on the matter.
Changpeng Zhao, CEO and founder of major global crypto exchange Binance, took to X (formerly Twitter) on Aug. 9 to raise the alarm on the use of AI in crypto by bad actors.
“This is pretty scary from a video verification perspective. Don’t send people coins even if they send you a video,” Zhao wrote.
This is pretty scary from a video verification perspective. Don’t send people coins even if they send you a video… ♂️ https://t.co/jvjZGHihku
— CZ Binance (@cz_binance) August 9, 2023
Like many other crypto exchanges, Binance’s internal Know Your Customer (KYC) processes require crypto investors to submit video evidence for processing certain transactions.
Binance CEO referred to an AI-generated video featuring HeyGen co-founder and CEO Joshua Xu. The video specifically included Xu’s AI-generated avatar, which looks just like the real HeyGen CEO and reproduces his facial expressions as well as voice and speech patterns.
“Both of these video clips were 100% AI-generated, featuring my own avatar and voice clone,” Xu noted. He added that HeyGen has been progressing with some massive enhancements to its life-style avatar’s video quality and voice technology to mimic his unique accent and speech patterns.
“This will be soon deployed to production and everyone can try it out,” Xu added.
Once available to the public, the AI tool will allow anyone to create a real life-like digital avatar in just “two minutes,” the HeyGen CEO said.
The public exposure to AI generation tools like HeyGen could potentially cause serious identity verification issues for cryptocurrency exchanges like Binance. Like many other exchanges, Binance practices KYC measures involving a requirement to send a video featuring the user and certain documents to get access to services or even to withdraw funds from the platform.
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Binance’s statement video specifically requires users to submit the video along with the picture of their identity document, such an ID card, driver’s license or passport. The policy requires users to mention the date and certain requests on the video record.
“Please do not put watermarks on your videos and do not edit your videos,” the policy reads.
Binance chief security officer Jimmy Su previously warned about AI deepfake-associated risks as well. In late May, Su argued that AI tech is getting so advanced that AI deepfakes may soon become undetectable by a human verifier.
Binance and HeyGen did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.
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Satoshi Nakamoto, the pseudonymous creator of Bitcoin, marks their 50th birthday amid a year of rising institutional and geopolitical adoption of the world’s first cryptocurrency.
The identity of Nakamoto remains one of the biggest mysteries in crypto, with speculation ranging from cryptographers like Adam Back and Nick Szabo to broader theories involving government intelligence agencies.
While Nakamoto’s identity remains anonymous, the Bitcoin (BTC) creator is believed to have turned 50 on April 5 based on details shared in the past.
According to archived data from his P2P Foundation profile, Nakamoto once claimed to be a 37-year-old man living in Japan and listed his birthdate as April 5, 1975.
Source: Web.archive.org
Nakamoto’s anonymity has played a vital role in maintaining the decentralized nature of the Bitcoin network, which has no central authority or leadership.
The Bitcoin wallet associated with Nakamoto, which holds over 1 million BTC, has laid dormant for more than 16 years despite BTC rising from $0 to an all-time high above $109,000 in January.
Satoshi Nakamoto statue in Lugano, Switzerland. Source: Cointelegraph
Nakamoto’s 50th birthday comes nearly a month after US President Donald Trump signed an executive order creating a Strategic Bitcoin Reserve and a Digital Asset Stockpile, marking the first major step toward integrating Bitcoin into the US financial system.
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Nakamoto’s legacy: a “cornerstone of economic sovereignty”
“At 50, Nakamoto’s legacy is no longer just code; it’s a cornerstone of economic sovereignty,” according to Anndy Lian, author and intergovernmental blockchain expert.
“Bitcoin’s reserve status signals trust in its scarcity and resilience,” Lian told Cointelegraph, adding:
“What’s fascinating is the timing. Fifty feels symbolic — half a century of life, mirrored by Bitcoin’s journey from a white paper to a trillion-dollar asset. Nakamoto’s vision of trustless, peer-to-peer money has outgrown its cypherpunk roots, entering the halls of power.”
However, lingering questions about Nakamoto remain unanswered, including whether they still hold the keys to their wallet, which is “a fortune now tied to US policy,” Lian said.
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Is Satoshi Nakamoto wealthier than Bill Gates?
In February, Arkham Intelligence published findings that attribute 1.096 million BTC — then valued at more than $108 billion — to Nakamoto. That would place him above Microsoft co-founder Bill Gates on the global wealth rankings, according to data shared by Coinbase director Conor Grogan.
Satoshi’s new addresses. Source: Conor Grogan
If accurate, this would make Nakamoto the world’s 16th richest person.
Despite the growing interest in Nakamoto’s identity and holdings, his early decision to remain anonymous and inactive has helped preserve Bitcoin’s decentralized ethos — a principle that continues to define the cryptocurrency to this day.
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The United States stock market lost more in value over the April 4 trading day than the entire cryptocurrency market is worth, as fears over US President Donald Trump’s tariffs continue to ramp up.
On April 4, the US stock market lost $3.25 trillion — around $570 billion more than the entire crypto market’s $2.68 trillion valuation at the time of publication.
Nasdaq 100 is now “in a bear market”
Among the Magnificent-7 stocks, Tesla (TSLA) led the losses on the day with a 10.42% drop, followed by Nvidia (NVDA) down 7.36% and Apple (AAPL) falling 7.29%, according to TradingView data.
The significant decline across the board signals that the Nasdaq 100 is now “in a bear market” after falling 6% across the trading day, trading resource account The Kobeissi Letter said in an April 4 X post. This is the largest daily decline since March 16, 2020.
“US stocks have now erased a massive -$11 TRILLION since February 19 with recession odds ABOVE 60%,” it added. The Kobessi Letter said Trump’s April 2 tariff announcement was “historic” and if the tariffs continue, a recession will be “impossible to avoid.”
Source: Anthony Scaramucci
On April 2, Trump signed an executive order establishing reciprocal tariffs on trading partners and a 10% baseline tariff on all imports from all countries.
Trump said the reciprocal tariffs will be roughly half the rate US trading partners impose on American goods.
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Meanwhile, the crypto industry has pointed out that while the stock market continues to decline, Bitcoin (BTC) remains stronger than most expected.
Crypto trader Plan Markus pointed out in an April 4 X post that while the entire stock market “is tanking,” Bitcoin is holding.
Source: Jeff Dorman
Even some crypto skeptics have pointed out the contrast between Bitcoin’s performance and the US stock market during the recent period of macro uncertainty.
Stock market commentator Dividend Hero told his 203,200 X followers that he has “hated on Bitcoin in the past, but seeing it not tank while the stock market does is very interesting to me.”
Meanwhile, technical trader Urkel said Bitcoin “doesn’t appear to care one bit about tariff wars and markets tanking.” Bitcoin is trading at $83,749 at the time of publication, down 0.16% over the past seven days, according to CoinMarketCap data.
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