I had the pleasure last week of hosting a discussion with fintech CEOs at the Reagan National Economic Forum in lovely Simi Valley, Calif. The focus was on how the U.S. can keep its edge as the world’s top economic power by leading in the two technologies that are defining the next era of finance: blockchain and AI.
The good news is that, so far, the U.S. is more than holding its own. During the panel, Ramp CEO Eric Glyman explained how AI is unlocking huge new efficiencies in corporate expense management, while the heads of Kraken and Bridge, Arjun Sethi and Zach Abrams, described how stablecoins are consolidating dollar dominance across the world. But there’s a dark side to all this: America’s adversaries, along with ordinary criminals, have also discovered the power of these technologies.
Abrams described how last week he received a video call from the CFO of Stripe, which last year acquired Bridge. The video, which perfectly replicated the CFO’s voice and likeness, directed Abrams to make an urgent financial transaction. The message was convincing enough that Abrams wrote the CFO for more details—only to receive a reply that exposed the whole thing as a well-executed deepfake.
This is hardly the first time bad guys have used AI deepfakes in a bid to defraud corporate executives. Just recall that poor employee in Hong Kong who did get taken in by a deepfake of her CFO that prompted her to wire $25 million to a hacker gang. But these sorts of one-off robberies will feel like peanuts if criminals can begin to deploy AI-based fraud at scale.
Think of notorious rip-offs like the widespread pandemic loan relief fraud—and then imagine the perpetrators cranking up the scope of their efforts with frontier AI models. Meanwhile, institutions like schools and county governments, whose lack of tech saviness have already made them easy pickings for ransomware gangs, could be in for a world of trouble as AI fraud advances.
Fortunately, there is a silver lining: The same technologies that will enable new waves of fraud also supply the means to defend against it. Ribbit Capital’s Sigal Mandelker, who fought terrorist financing during a stint as Under Secretary of the Treasury, made the case on stage that blockchain ledgers—where an ever-growing number of financial transactions take place—are ideal for tracking and stopping financial crime. Others on the panel made the point that the crypto industry is making rapid progress on new identity solutions that can prevent deepfakes and other AI-powered crimes.
This is the right way to see the problem. The solution to stopping the next era of fraud will not come from trying to halt the use of crypto and AI. Instead, governments and good actors must accelerate their efforts to master these tools and deploy them as defenses. The big question, of course, is whether they can do so in time.
Jeff John Roberts [email protected] @jeffjohnroberts
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