Here’s how to quickly spot a deepfake crypto scam — cybersecurity execs
Blockchain security execs warn that crypto investors are more “susceptible” to deepfake crypto scams because of the fast-paced nature of crypto markets where every second counts.

Crypto investors have been urged to keep their eyes peeled for “deepfake” crypto scams to come, with the digital-doppelganger technology continuing to advance, making it harder for viewers to separate fact from fiction.

David Schwed, the chief operating officer of blockchain security firm Halborn, told Cointelegraph that the crypto industry is more “susceptible” to deepfakes than ever because “time is of the essence in making decisions,” which results in less time to verify the veracity of a video.

Deepfakes use deep learning artificial intelligence (AI) to create highly realistic digital content by manipulating and altering original media, such as swapping faces in videos, photos, and audio, according to OpenZeppelin technical writer Vlad Estoup.

Estoup noted that crypto scammers often use deepfake technology to creat fake videos of well-known personalities to execute scams.

An example of such a scam was a deepfake video of FTX’s former CEO in November, where scammers used old interview footage of Sam Bankman-Fried and a voice emulator to direct users to a malicious website promising to “double your cryptocurrency.”

Schwed said that the volatile nature of crypto causes people to panic and take a “better safe than sorry” approach, which can lead to them getting suckered into deepfake scams. He noted:

“If a video of CZ is released claiming withdrawals will be halted within the hour, are you going to immediately withdraw your funds, or spend hours trying to figure out if the message is real?”

However, Estoup believes that while deepfake technology is advancing at a rapid rate, it’s not yet “indistinguishable from reality.”

How to spot a deepfake: Watch the eyes

Schwed suggests one useful way to quickly spot a deepfake is to watch when the subject blinks their eyes. If it looks unnatural, there’s a good chance it’s a deepfake.

This is due to the fact that deepfakes are generated using image files sourced on the internet, where the subject will usually have their eyes open, explains Schwed. Thus, in a deepfake, the blinking of the subject’s eyes needs to be simulated.

Schwed said the best identifier of course is to ask questions that only the real individual can answer, such as “what restaurant did we meet at for lunch last week?”

Estoup said there is also AI software available that can detect deepfakes and suggests one should look out for big technological improvements in this area.

He also gave some age-old advice: “If it’s too good to be true, it probably is.”

Last year, Binance’s chief communications officer, Patrick Hillman, revealed in an August blog post that a sophisticated scam was perpetrated using a deepfake of him.

Hillman noted that the team used previous news interviews and TV appearances over the years to create the deepfake and “fool several highly intelligent crypto members.”

He only became aware of this when he started to receive online messages thanking him for his time talking to project teams about potentially listing their assets on

Earlier this week, blockchain security firm SlowMist noted there were 303 blockchain security incidents in 2022, with 31.6% of them caused by phishing, rug pulls and other scams.


Samsung investment arm considering spot-Bitcoin ETF in Hong Kong
Samsung Asset Management and CSOP Asset Management launched three Bitcoin futures-based Bitcoin ETFs in the city within the last month and is now looking at opportunities for a spot Bitcoin ETF.

Hot on the heels of its Bitcoin futures exchange-traded fund (ETF) in Hong Kong, Samsung Asset Management has indicated it’s considering the launch of a spot Bitcoin ETF on the city’s exchange if policies allow for it.

In an interview with Bloomberg published on Jan. 13, Hong Kong chief executive for Samsung Asset Management, Sam Park, said: “It really depends on how policy is going to be developed.” He added that the Hong Kong administrators are “clearly” interested in developing the city into a crypto hub.

An ETF analyst at Bloomberg Intelligence, Rebecca Sin, noted that “Hong Kong is well positioned to become Asia’s crypto gateway,” and expects spot Bitcoin and Ether (ETH) products to be allowed there by the year’s end.

A spot market refers to a market where the exchange of financial instruments is settled immediately, while a futures market refers to a market where participants buy and sell contracts to be settled at a later date.

Samsung launched its Bitcoin futures ETF on the Hong Kong Exchanges and Clearing Market on Jan. 13, with the exchange currently the only one in Asia that supports the trading of Bitcoin futures ETFs.

As of the time of publishing, the ETF has already recorded a 4.2% increase in its price.

Other Hong Kong futures ETFs have also seen interest, with two ETFs managed by CSOP Asset Management having raised $73.6 million in investments ahead of their Dec. 16 listing.

As noted by CSOP executive Yi Wang at the time: “The ETFs do not invest in physical Bitcoin and [...] there are more regulatory safeguards for investors compared to tokens traded on unregulated platforms.”

In a Twitter Spaces interview with Bloomberg Asia on Jan. 5, Animoca Brands Chairman Yat Siu indicated that Hong Kong was looking more attractive as a listing location compared to the United States, noting:

“The U.S. obviously seemed to be the market at the time that was perhaps a good one. But I would argue that, you know, places like Asia, particularly Hong Kong, are starting to look pretty attractive with their virtual asset policies, [...] with their desire to basically be a leader in the space.”

A lack of regulatory clarity has often been cited as the reason why so much crypto activity is leaving the United States, and has prompted lawmakers to push for crypto regulations as soon as possible.


‘Wall of worry’ led to digital wallets, blockchain tech ignored: Cathie Wood
ARK Invest CEO Cathie Wood said the equity market faced a “wall of worry” in 2022, which saw them overlook blockchain and digital wallets.

ARK Invest CEO Cathie Wood believes that digital wallets and blockchain tech were among the “game-changing innovations” that the equity markets largely ignored in 2022.

In a Jan. 12 blog post on the ARK Invest website, Wood suggested that the equity market faced a “wall of worry” in 2022, caused by fears of entrenched inflation and higher interest rates and largely ignored some innovative technologies.

Wood highlighted that digital wallets are “replacing cash and credit cards,” noting that they overtook cash as the top transaction method for offline commerce in 2020.

Further arguing that digital wallets should not be overlooked, Wood noted that they also accounted for approximately 50% of global online commerce in 2021.

Wood suggested that the recent collapse of crypto exchange FTX hasn’t affected the larger mission of what public blockchains were intended for. She noted:

“Public Blockchains like Bitcoin and Ethereum have not skipped a beat in processing transactions.”

Wood highlighted how the FTX collapse educated crypto investors to be more diligent with where they store their crypto assets, saying that the share of trading volume on decentralized exchanges, which allow for trading without a central intermediary, rose 37%, jumping from 8.35% to 11.4%.

Wood said she has never, in her “30 years working in portfolio management,” experienced such unstable market conditions, saying she has never seen “markets this dislocated.”

The CEO suggested that the economy is facing a challenging situation, with a decrease in money supply, a decline in commodity prices and the “unwinding” of bloated inventories, which indicate a slowdown in inflation and possibly even deflation.

Wood noted in the report that the fear is high in investors stating that investors are holding “high levels” of cash not seen since the 9/11 crisis in 2001.

Other “game-changing” innovations that Wood believed the equity market “largely ignored” in 2022 included artificial intelligence, electric vehicles, space exploration and 3D printing.

She believes that despite the uncertainty in the market, disruptive innovation technologies that “solve problems” have historically “gained share during turbulent times.”


This Daily Dose was brought to you by Cointelegraph.

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