Crypto: AI Breaks The KYC Barriers Of Exchanges

Innovations in artificial intelligence continue to astonish, but not all serve noble intentions. This October, the cybersecurity company Cato Networks reveals an AI tool named ProKYC, designed to bypass KYC (Know Your Customer) security measures in cryptocurrency exchanges. This tool opens the door to new forms of fraud, at the expense of platforms and users. While this phenomenon remains difficult to detect, it could transform how 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 is no wonder that fraudulent tools are becoming more sophisticated.

ProKYC, introduced by Cato Networks, embodies this new generation of fraudulent tools. Unlike traditional methods of buying fake documents on the dark web, ProKYC autonomously creates new identities. Using deepfake videos, this tool can produce images and videos that successfully pass facial recognition checks on the largest crypto platforms, like Bybit.

The tool, specially adapted for crypto exchanges, offers a simple process. In just a few clicks, a user can generate a unique face, adjust details like fingerprints, and get documents such as a virtual passport.

The promotional video of ProKYC, published by Cato, shows how this tool assembles a fake identity using accompanying images and videos.

With disturbing accuracy, these deepfakes simulate human faces, realistic enough to deceive the majority of current KYC controls.

Crypto security facing AI challenges

The impact of ProKYC goes far beyond cryptos. Indeed, this tool also claims to bypass KYC protocols of payment platforms like Stripe and Revolut.

With an annual subscription of about $629, ProKYC positions itself as an affordable service, a profitable investment for fraudsters looking to multiply accounts under fictitious identities.

This phenomenon, known as New Account Fraud (NAF), has already caused significant losses for businesses.

Etay Maor, chief security strategist at Cato Networks, warns that this evolution is difficult to combat. Too many restrictions risk triggering false positives, penalizing legitimate users, while more lenient controls would allow fraudsters through.

The sophisticated nature of ProKYC may require hybrid solutions, combining advanced biometric detection technologies and human oversight to detect inconsistencies that only a machine might not catch. Meanwhile, young people see crypto as a promising future.