An epidemic of fake is upon us.
Fake news, fake cryptocurrencies, fake ICOs, fake Facebook profiles, deepfakes, and good old-fashioned liars; it’s impossible to believe what you are seeing, hearing or reading online.
The widely identified dark patterns prevalent across the social networks we use or inserted into our privacy agreements and the transparent lies of “caring about your data,” it’s almost too much to contend with. In this epidemic of fakeness, a quote of one of my heroes jumps to mind, “The secret of life is honesty and fair dealing. If you can fake that, you’ve got it made.”
Groucho Marx was making a joke, but his point rings true. Full page ads in newspapers apologizing for bad practices don’t win back peoples trust. Once you know how the sausage is made, there’s no way to forget it.
When did this all start?
In reality, if you want to track the emergence of extremely sophisticated technological scams we have to rewind the clock to 2015, and the well publicised DyreWolf. It was a sophisticated hacking scheme that was unlike any other up until that point in time. DyreWolf was using a combination of phishing and malware to defraud over one million dollars and initiate a cyber attack the sophistication of which was unprecedented. Three years on, things are far more sophisticated, and the numbers of cyber attacks grow annually. Its estimated that fraud and phishing attacks now cost business in the United States half a billion dollars every year.
Technologies like cryptocurrencies were still in the background three years ago and were never expected to become the success that they have become. Bitcoins first peak in price was at the end of December 2013 reaching just over six thousand in value. Fast forward four years later and it peaked in December 2017 at nearly twenty thousand in value, albeit with evidence of price manipulation.
Despite the lingering promise of turning early adopters into millionaires, the crypto revolution has been plagued with fake and fraudulent icons and cryptocurrencies from the start that left a substantial amount of those early revolutionaries without their life’s savings.
Throw some extremely high profile hackings of cryptowallets totaling in the hundreds of millions, and the DyreWolf looks more like a timid house pet when compared to the sophistication and sheer monetary haul of modern crypto and phishing scams. The associated costs of breaches of private records are also astronomical as an IBM security report estimate the cost of a mega breach to be in the region of 40 to 350 million dollars.
The primary issue with cryptocurrencies gaining legitimacy is the fact that they are relatively new, they have established legacies of untrustworthy practices and pragmatically speaking, their association with criminality is going nowhere fast. Over one thousand cryptocurrencies have failed in 2018 alone, with the site Deadcoins listing over eight hundred different cryptocurrencies that have failed, died or were outright scams.
So how can we stop this epidemic of fakes or at the very minimum, fight back?
A.I. and machine learning seems to be the answer to at least a large portion of the fakeness epidemic. Companies who are designing tools and platforms to discern the real from the fake are also racking up extremely impressive numbers in VC funding, running into billions.
TraceLink who is a software as a service provider for eliminating counterfeit pharmaceuticals just received 60 million dollars in series D funding. TraceLink helps pharmaceutical companies comply with country-specific track-and-trace requirements through their supply chain, which has grown increasingly important following the passage of the Drug Supply Chain Security Act in 2013. The aim is to prevent individuals’ exposure to drugs that could be counterfeit, stolen, contaminated or otherwise harmful.
It’s not just pharmaceuticals that suffer from scam artists; there are also the garden variety plagiarists to deal with. Social SafeGuard’s SaaS platform is here to help with that too. The platform is designed to alert customers to risks that might cause damage to a business or brand’s reputation — such as brand impersonation, compliance issues and the spread of fake news. Its platform uses machine learning and a customized policy engine to offer real-time monitoring of 50 digital and social channels integrating via an API.
Paypal has also acquired Similarity, another machine learning based service for counteracting fraud has been purchased for 120 million. Paypal has bought four such companies this year so far.
Another company using AI and machine learning is Singapore based CashShield. CashShield’s AI constantly monitors accounts for unusual or suspicious behaviors and alerts the company that someone may have gained access if it detects abnormalities using AI, it can constantly inspect the huge volume of accounts at a scale that would be impossible for companies relying primarily on human analysis.
The reason that so many companies are getting funded at such a high level is that at the moment there is an extreme shortage of cybersecurity experts.
The number of phishing attacks and fraud is always increasing in frequency and scale. With the ability to now hack currencies and empty crypto wallets, the demand for experts to prevent such attacks now far outstrips supply. Machine learning and A.I. are the main defense force that prevents such situations as they efficiency at detecting threats and their ability to defend against them far exceeds that of any human.
The lack of experts is also causing major tech companies to buy up every cybersecurity company they can in the hopes that they are not exposed to a large-scale attack in the mean time. If you look through the companies heavily invested in purchasing cybersecurity firms, there is no surprise that the giants of tech and communication are the primary investors.
As VentureBeat reported, “Cisco has also been acquiring cybersecurity companies, including Sourcefire, which it snapped up for a hefty $2.7 billion; OpenDNS, which it acquired for $635 million; and Lancope, which it brought on board for a cool $453 million.”
If the epidemic of fraud and cyber attacks is in its infancy, we need to understand that the more that industries automate, the more vulnerable they are to being hacked.
Fake news is killing more than democracy.
The fake news seems to be the most difficult to combat. One researcher detailed in excruciating detail how hard it is to detect fake news even when you know what you’re looking for. In India fake news has contributed to multiple lynchings as a result of fake news being spread by forwarded messages via WhatsApp.
Facebook and Twitter are trying to remove as many bots and fake accounts as possible, but of course, like a never-ending game of whack a mole, this is not enough. The control of the spread of fake news seems to be more dangerous for those in politically unstable environments, but the threat to our societies, that are becoming increasingly politicised has left a lingering sense of mistrust.
Massive financial fraud and disintegration of societies ability to trust each other is the precise reason that fraud detection and cybersecurity are needed more now than ever.