Sat 12 October 2024 ▪
4
min reading ▪ acc
Innovations in artificial intelligence never cease to amaze, but not all of them serve noble purposes. This October, cybersecurity company Cato Networks unveiled an AI tool called ProKYCdesigned to bypass KYC (Know Your Customer) security measures on cryptocurrency exchanges. This tool opens the door to new forms of fraud at the expense of platforms and users. Although this phenomenon is still difficult to detect, it could change the way crypto exchanges approach security.
ProKYC: when AI creates virtual identities in a few clicks
The crypto market has always attracted cybercriminals. With millions at stake, it’s no wonder that fraud tools are becoming increasingly sophisticated.
Presented by Cato Networks, ProKYC embodies this new generation of fraud tools. Unlike traditional methods of buying fake documents on the dark web, ProKYC creates new identities autonomously. Using deepfake videos, this tool is able to produce images and videos that pass facial recognition checks on the biggest crypto platforms like Bybit.
The tool, specially adapted for crypto exchanges, offers a simple process. With a few clicks, the user can generate a unique face, edit details such as fingerprints and obtain documents such as a virtual passport.
A ProKYC promotional video released by Cato shows how the tool constructs a fake identity using accompanying images and videos.
These deepfakes simulate human faces with disturbing accuracy, realistic enough to fool most current KYC checks.
Cryptocurrency security faces AI challenges
The impact of ProKYC goes far beyond cryptocurrencies. The tool also claims to be able to bypass the KYC protocols of payment platforms such as Stripe and Revolut.
With an annual subscription of around $629, ProKYC positions itself as an affordable service, a worthwhile investment for fraudsters trying to multiply accounts under fictitious identities.
This phenomenon, known as New Account Fraud (NAF)has already caused significant losses to businesses.
Etay Maor, chief security strategist at Cato Networks, warns that this development is difficult to combat. Too many restrictions risk setting off false alarms and penalizing legitimate users, while looser checks would allow fraudsters to get through.
The sophisticated nature of ProKYC could require hybrid solutions that combine advanced biometric detection technologies and human monitoring to detect inconsistencies that a machine alone could not detect. Meanwhile, young people see a promising future in cryptocurrencies.
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Fascinated by Bitcoin since 2017, Evariste continued to research the topic. If his first interest was trading, now he is actively trying to understand all the developments focused on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the industry as a whole.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.