AI-Generated Fake IDs Selling for $15 Raise Concerns in Crypto Exchanges

AI-Generated Fake IDs Selling for $15 Raise Concerns in Crypto Exchanges

The $15 AI-generated fake IDs are reportedly being used to avoid identity verification procedures on cryptocurrency exchanges, which might provide cryptocurrency hackers and con artists with a new tool.

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A new service has reportedly successfully passed know-your-customer checks on cryptocurrency exchanges. The service claims to use artificial intelligence (AI) “neural networks” and “generators” to produce fake driver licenses and passports. The service costs only $15 per person.

International reach

The website OnlyFake creates realistic fake driver’s licenses and passports from 26 countries. These countries include the United States, Canada, Britain, Australia, and multiple European Union countries. The website accepts payments in various cryptocurrencies through Coinbase’s business payments service.

On Feb. 5, 404 Media reported that it successfully bypassed the KYC verification of the crypto exchange OKX. They achieved this by using a photo of a British passport the outlet generated with the site, where the ID appeared to be laid on a bedsheet as if a picture of it were taken.

Concerns about cryptocurrency exchanges

The use of these fake documents has sparked concerns about how hackers and crypto scammers leverage them to open bank accounts and exchanges while hiding their real identities.

According to OnlyFake’s pseudonymous owner, known as “John Wick,” these IDs can get around these KYC checks on popular exchanges such as Binance, Kraken, Bybit, Huobi, Coinbase, and OKX, as well as the crypto-accepting Neobank Revolut.

One of the affected crypto exchanges, however, OKX, firmly denied any complicity in or tolerance of fraudulent activities. Together with outside partners, they have started an investigation to find the cause of the problem and uphold strict compliance guidelines.

According to an OKX spokesperson, they are committed to aggressively fighting fraudulent conduct on their platform and seeking the highest compliance standards. The spokesperson, in addition, emphasized that the abusive use of artificial intelligence (AI) to conduct fraudulent activity is an evolving and industry-wide challenge that OKX is comprehensively addressing.

OnlyFake site refutes the claim

The OnlyFake site, however, claims that it doesn’t produce fake documents because it is illegal. Also, its terms state that its templates are only for use in movies, TV shows, [and] web illustrations.

Generating a fake document on the website takes less than a minute. This allows users to upload photos or select one from a preset selection.

OnlyFake additionally provides image metadata spoofing. This lets users change the device used to take the purported shot as well as the GPS position, date, and time. With the aid of this functionality, users can successfully pass identity verification services whose legitimacy is determined by such data.

Cryptocurrency scammers and hackers have long employed techniques to conceal their true identities while forging documents and gaining access to cryptocurrency exchanges.

Blockchain security company CertiK discovered an underground market in late 2022 where people were offering as little as $8 for the sale of their identities. In exchange, they would register bank and exchange accounts and serve as the verified face of fictitious cryptocurrency businesses.

Executives in the cryptocurrency sector have expressed worries about the efficacy of video verification used in certain identity checks due to the ease and widespread availability of AI-deep fake techniques.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.