Key Takeaways
- Incidents of crypto fraud originating from Nigeria surged by 1,056%, in the past year.
- Meanwhile, deepfake fraud is up 964% in China during the same period.
- Chinese businesses and consumers have been targeted by fraudsters using AI.
Crypto scams and deep fake fraud are two of the biggest threats in financial crime today, and research shows that fraud rates are growing faster in certain countries.
According to analyses by sumsub, in the past year, the rate of crypto fraud originating from Nigeria has surged by 1,056%. Meanwhile deepfake scams have grown fastest in China, where incidents of the fraud vector are up 964% since the first half of 2023.
Nigeria Tops Crypto Fraud Leaderboard
As Africa’s largest Bitcoin (BTC) market and home to an established tradition of online scam artists, known locally as “Yahoo boys,” Nigeria has become a hotbed of crypto fraud in recent years.
With crypto fraud on the rise, the government has increasingly cracked down on the entire cryptocurrency sector, warning Nigerians against investing in digital assets and launching a crusade against Binance that has even led to accusations of kidnapping.
Although Nigerian fraudsters’ embrace of cryptocurrency is a relatively new phenomenon, the tactics they use are much older.
Many fraud operations law enforcement agencies have taken down in the country simply put a crypto twist on established fraud methods, such as investment scams. For example, one recent operation targeted the fraudulent McHarvy investment platform, which tricked victims out of $1.6 million, before it was shut down by the Nigerian Economic and Financial Crimes Commission (EFCC).
Of course, crypto fraud is an umbrella term that includes all kinds of criminal activity, ranging from sophisticated attacks on businesses to old-fashioned identity theft. However, although Nigeria may top the table for fraudsters’ use of cryptocurrency, other countries are taking the lead elsewhere.
AI-driven Fraud Surges
In 2024, one of the biggest trends in online fraud is AI, with criminals increasingly using deepfake images, video, and audio to dupe victims, forge documents, and bypass biometric authentication systems.
Alongside the rising deepfake threat, large language models (LLMs) designed specifically for illicit activities, such as FraudGPT, have amplified criminals’ capacity to contact, filter, and groom victims.
Deepfake Scams Target Chinese Businesses and Consumers
According to Sumsub’s research, China has emerged as a hub of deepfake fraud, which has increased there more than anywhere else in the past year.
The findings are concordant with a string of attacks on China-based businesses, which have been defrauded out of millions of dollars by criminals using AI deepfakes.
In one high-profile case, the British engineering firm Arup lost $200 million HKD after a Hong Kong-based employee was duped into initiating the transaction by an AI-generated video call.
Meanwhile, Chinese media reports have identified rising incidences of consumer deepfake fraud, with victims typically being tricked into believing requests for money come from friends or relatives.
As financial crime evolves, the rise of crypto scams in Nigeria and deepfake fraud in China reflect how fraudsters make use of new technologies, emphasizing the need to remain vigilant against emerging and established threats.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
