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Innovations in artificial intelligence continue to be amazing, but not all of them serve noble intentions. In October of this year, cybersecurity company Cato Networks Pro KYCdesigned to bypass KYC (Know Your Customer) security measures at cryptocurrency exchanges. This tool opens the door to new forms of fraud at the expense of the platform and users. While this phenomenon remains difficult to detect, it could change the way cryptocurrency exchanges approach security.
ProKYC: When AI creates virtual identities in a few clicks
The cryptocurrency market has always attracted cybercriminals. With millions of dollars at stake, it's no wonder fraud tools are becoming more sophisticated.
ProKYC, introduced by Cato Networks, embodies this new generation of fraud tools. Unlike the traditional method of purchasing fake documents on the dark web, ProKYC creates new identities autonomously. The tool can use deepfake videos to create images and videos that pass facial recognition checks on the biggest crypto platforms such as Bybit.
This tool is specially adapted for cryptocurrency exchanges and offers a simple process. With just a few clicks, users can generate their own face, adjust details such as fingerprints, and obtain documents such as a virtual passport.
A promotional video for ProKYC published by Cato shows how the tool uses accompanying images and videos to assemble fake IDs.
These deepfakes simulate human faces with terrifying accuracy and are realistic enough to fool most current KYC controls.
Crypto security faces AI challenges
The impact of ProKYC goes far beyond cryptocurrencies. In fact, the tool also claims to bypass the KYC protocols of payment platforms like Stripe and Revolut.
With an annual subscription fee of approximately $629, ProKYC positions itself as an affordable service and a good investment for fraudsters looking to grow accounts with 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 evolution will be difficult to fight against. Too many restrictions can cause false positives and risk penalizing legitimate users, while looser controls allow fraudsters to gain entry.
The advanced nature of ProKYC may require a hybrid solution that combines advanced biometric technology with human oversight to detect discrepancies that cannot be detected by machines alone. Young people, on the other hand, see cryptocurrencies as a promising future.
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Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
