Deepfake Stock Market Scams: How AI is being used to trick investors

The increasing misuse of artificial intelligence, especially the creation of deepfakes, is becoming a big problem. Deepfakes are artificially generated fake images, voices, and videos that are so convincing they can deceive individuals and businesses, leading to substantial personal, financial, and professional losses. The stock market is no exception and many unsuspecting victims unaware of deepfake technologies are falling prey to such scams.

For instance, on November 22, Zerodha, a well-known stock market platform, reported an incident where a customer narrowly avoided a scam that could have cost them Rs 1.80 lakh. Nithin Kamath, the CEO of the company, warned that such fraudulent attacks are on the rise due to the surge of AI-powered apps capable of creating deepfakes.

Unfortunately, not everyone has been able to avoid such scams. In 2019, an employee of a British energy company was duped into transferring $250,000 (Rs 20.6 crores) by a deepfake voice that impersonated the CEO of the parent organization. In a similar incident in 2020, a bank manager based in Hong Kong lost $35m (Rs 288.7 crore) due to a highly convincing deepfake call. 

Why the sudden surge of Deepfake scams?

These incidents took place even before the emergence of ChatGPT and the explosion of generative AI. But today, advanced AI tools are easily accessible to the public, including those with malicious intent. You don't need much computing power or high-tech skills to create deepfakes.  

Clone Apps

Scammers have now turned to using fake clone apps to create videos of profit and loss statements, ledgers, and other reports of trading platforms and bank accounts. These fake videos often appear more authentic than screenshots, making them highly deceptive.

During an investigation, India Today’s Open Source Intelligence (OSINT) Team discovered numerous Telegram channels offering fake documents, screenshots, and clone interfaces of popular apps like Zerodha, Grow, and Upstox. These services, which charge users several thousand per month, allow them to manipulate their profit and loss statements.

One such app, Zerodha Kite Replicate, charges Rs 4000 monthly and Rs 20,000 yearly. It allows users to edit almost everything, including profit and loss, marketwatch, positions, holdings, fund, and profile sections. Another Telegram channel offering clone interface services for Zerodha Kite and Groww charges Rs 3599 per month.

The business of these clone apps appears to be booming. A Telegram channel for the cloned Zerodha app, with over 8,300 subscribers, announced in June that they were struggling to handle the influx of customers.

The source codes for these cloned apps are freely available in public, making it easy even for novice developers to create them. Many such scripts were found on Github during the investigation.

Also read: Deepfake videos: Is govt regulation on the cards?

Also read: Ashwini Vaishnaw on Deepfake menace: Govt considering penalties on both creators and platforms