Deepfakes undermine selfie and liveness KYC on centralized crypto exchanges

Beincrypto reports AI-generated deepfakes are spreading rapidly and now challenge selfie and liveness checks used in centralized exchanges' KYC processes.

Newer tools can respond dynamically to prompts and convincingly replicate natural facial movements and synchronized speech, so basic checks such as blinking, smiling or head movements may no longer reliably confirm a user's identity. Industry observers and technology researchers have warned that AI-generated images and videos are increasingly appearing in contexts like insurance claims and legal disputes.

Governments are moving to curb deepfakes: this week Malaysia and Indonesia restricted access to Grok, and California Attorney General Rob Bonta said his office was investigating multiple reports involving non-consensual sexualized images.

The piece warns that centralized crypto platforms, which often rely on automated onboarding, could become attractive targets and that without stronger safeguards automated onboarding may expose exchanges to growing fraud and identity abuse; whether platforms will adapt quickly enough before the technology outpaces defenses remains unclear.

Key Topics

Crypto, Deepfakes, Kyc, Liveness Checks, Centralized Exchanges, Xai