Financial fraud or scams probably predates recorded history. This lucrative endeavor has allowed many bad actors to amass wealth at the expense of unsuspecting victims. With the emergence of Artificial Intelligence, con artists have found a new tool to help them with their schemes. Nikhil Rathi, head of the United Kingdom’s Financial Conduct Authority (FCA), recognized this new threat and is asking financial institutions to deploy more resources to combat AI-assisted fraudulent activities.
Rathi recognized that AI is helping criminals to perpetuate cyber-attacks, cyber fraud, and identity theft. Criminals have several tools at their disposal, which include AI-generated content, chatbots, or deep fake techniques to create fake websites, emails, or videos that trick people into sending money or revealing personal information.
He wants financial institutions and regulators to step up efforts to combat modern and sophisticated scams. He stated that “As AI is further adopted, the investment in fraud prevention and operational and cyber resilience will have to accelerate simultaneously… We will take a robust line on this – full support for beneficial innovation alongside proportionate protections.
AI in Crypto Scams
Crypto by itself is a secure way of transmitting value. The underlying blockchain keeps a digital ledger that is hard to hack, but this does not stop scammers from looking for weak links. The usual weak links are the actual crypto users, which could be fooled into thinking that they are transactions with a legitimate platform.
One notorious con is the pig butchering scam, which entails feigning a romantic relationship with a victim. This is a lengthy process since the con artist needs to establish rapport with the target. Once they have established a relationship, the victim will be tricked into investing in crypto. Possible uses of AIs include writing scripts to lure targets and the generation of supposed pictures of the scammer that could be sent to the victims.
AIs have also made it possible to write codes to create new crypto tokens. Creating a token by itself is innocent enough, but creating a new one with the intent of rug-pulling investors is another story.
Deep fakes can also trick victims into believing a well-known person is supporting a fake crypto project.
Technology is Just a Tool
AI and crypto are innovations that are designed to make life easier for people. Our civilization’s progress depends on using newer technologies. However, there will always be bad actors who will use these innovations for their selfish purposes. Nuclear power and dynamite were discovered and invented with good intentions, but we were able to use them as tools to hurt people.
The UK’s FCA head is right in saying that tools for fraud prevention should also accelerate in tandem with the advancement of AI. If criminals have the resources to use AI, then there should be nothing stopping the government from using the same technology for the common good.
Source: The Guardian
Feature Image from Pixabay
