False identification documents generated by artificial intelligence are now passing through Know Your Customer (KYC) checks on several cryptocurrency exchanges. This new development raises concerns that it could provide hackers and fraudsters with a new advantage in the realm of cybercrime. These false identification documents are readily available for as little as $15, increasing the risk of their misuse.
Artificial Intelligence and Fake Document Generators
A new service utilizing "neural networks" and "generators" of artificial intelligence can create realistic fake driver's licenses and passports from 26 different countries, including the United States, Canada, the United Kingdom, Australia, and several European Union member states. What's even more alarming is that this service accepts payments in various cryptocurrencies through the commercial payment service Coinbase.
How Does It Work?
A report from 404 Media, dated February 5th, details a case where individuals successfully circumvented the KYC verification process of the cryptocurrency exchange OKX. How did they do it? Simply by uploading a photograph of a British passport generated by this new service. The resulting photograph appeared as if the ID card was placed on a bedsheet, creating the illusion of a recently taken picture.
Widespread Usage Across Various Platforms
A Telegram channel, showcases numerous examples of individuals who have successfully used these false identification documents to bypass verification on various cryptocurrency exchanges and financial services. Among these platforms are exchanges like Kraken, Bybit, Bitget, Huobi, and even PayPal.
Potential Risk for Crypto Fraudsters and Hackers
This new service could pose a significant challenge for crypto fraudsters and hackers. They could use it to create false identities and subsequently open accounts on cryptocurrency exchanges and banks, concealing their true identities and complicating their detection. This could lead to further complications for authorities monitoring crypto transactions.
Responses from Exchanges and Companies
As the report notes, cryptocurrency exchanges such as Binance, Kraken, Bybit, Bitget, Revolut, Huobi, and PayPal have not yet provided any comments regarding these claims of circumventing their identity checks. It is possible that they will need to take steps to strengthen their KYC processes to safeguard the security of their platforms and users against this new risk.
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