DeepFake is a Threat to Startups, Polygon Co-Founder Reveals

In today’s rapidly evolving digital landscape, deepfakes have emerged as a major threat to startups and businesses worldwide. While many think of deepfakes as just another online trend, the truth is that they have far-reaching consequences, especially for new and emerging companies.

Sandeep Nailwal, the co-founder of Polygon, recently made headlines by revealing the growing concern over deepfake scams targeting startups. But what exactly is a deepfake, and why should startups care?

What Is Deepfakes?

Deepfakes are highly realistic AI-generated videos, audio recordings, and images designed to manipulate reality. The technology uses advanced machine learning models to create lifelike renditions of real people, making it difficult for viewers to distinguish between fact and fiction.

These deepfakes have been used for various purposes, from creating fake news to manipulating public opinion. However, in the world of startups, deepfakes are being used for more malicious purposes, such as defrauding companies and deceiving investors.

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Sandeep Nailwal’s Warning to Startups

Co-founder of Polygon, Sandeep Nailwal, has been vocal about the growing threat of deepfake scams. He revealed that deepfakes have been used to impersonate key figures in the crypto industry, including himself, to deceive investors.

While Polygon has not yet been directly affected by these scams, the potential for harm is significant.

Nailwal’s warning underscores the need for startups, especially in the tech and crypto sectors, to be vigilant. With deepfakes becoming more accessible, it’s only a matter of time before more companies fall victim to these sophisticated scams.

Bad actors' ability to manipulate reality so convincingly could lead to severe financial losses and damage to reputations.

The Rise of Deepfakes in the Crypto Industry

The crypto industry, in particular, has seen a rise in deepfake-related scams. As blockchain technology becomes more popular, so does its potential for exploitation. Hackers and scammers are using deepfakes to impersonate influential figures in the industry to trick startups into making bad investments or sharing sensitive information.

Nailwal himself has been targeted by such scams. AI-generated videos have been circulated, featuring fake messages from him or other key figures within the crypto industry. These deepfakes have been used to lure unsuspecting investors into fraudulent schemes.

As a result, Polygon and other startups in the space have found themselves in the crosshairs of malicious actors, highlighting the urgent need for stronger identity verification processes.

The Economic Impact of Deepfake Scams

The financial toll of deepfake-related scams is staggering. According to recent reports, the total losses due to deepfake scams in the first quarter of 2025 alone amounted to $200 million. This figure is alarming, as it reveals how much damage deepfakes are causing, especially in the cryptocurrency and blockchain sectors.

Experts predict that deepfake-related losses could escalate to $40 billion by 2027. This projection indicates the potential for massive economic disruption.

Startups and companies that fail to implement proper safeguards risk suffering similar losses. The ability of scammers to create convincing fake identities makes it easy for them to deceive investors and steal funds.

What Can Startups Do to Protect Themselves?

As deepfake scams continue to rise, startups must take proactive measures to protect themselves. The first step is improving identity verification processes. Implementing multi-factor authentication (MFA) and biometrics can significantly reduce the risk of identity theft.

Startups should also consider investing in technology that can detect deepfakes. AI-powered tools are now available that can analyze videos and images to identify signs of manipulation. These tools can be integrated into existing security systems to add an extra layer of protection.

Furthermore, regulatory measures must be put in place to combat the growing problem of deepfakes.

Governments and industry leaders need to collaborate on creating strict laws and regulations that prevent the use of deepfakes for fraudulent activities. By doing so, they can reduce the impact of these scams and protect startups from financial losses.

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How Blockchain Can Help Combat Deepfake Scams?

Interestingly, blockchain technology itself offers a solution to the deepfake problem. Since blockchain is known for its transparency and immutability, it can be used to verify the authenticity of videos, audio, and images.

By using blockchain to create an immutable record of digital media, startups can ensure that any content they receive or share is authentic and unaltered.

For example, blockchain could be used to track the origin of video messages or images, allowing companies to verify whether the content was manipulated or is genuine. This could be particularly valuable in preventing deepfake scams, as it would make it much harder for fraudsters to create convincing fake identities.

Conclusion

Deepfakes are no longer a distant concern, they are a present-day reality that can cause significant harm to startups, especially in the tech and crypto sectors.

With millions of dollars at risk, startups must implement strong identity verification methods, invest in deepfake detection technology, and work towards regulatory changes to combat this growing threat.

As Sandeep Nailwal has highlighted, startups need to be vigilant and proactive to prevent falling victim to these scams. With the right tools and strategies in place, companies can mitigate the risks posed by deepfakes and protect their financial stability.

If you want to stay ahead of the curve, be sure to keep up with the latest developments in the crypto world. Check out Bitrue Exchange for trading opportunities or dive into the latest crypto news to stay informed!

FAQs

1. What is a deepfake?

A deepfake is an AI-generated media (video, audio, or image) that manipulates reality to impersonate someone else, often for malicious purposes.

2. How are deepfakes a threat to startups?

Deepfakes can be used to impersonate key figures in a startup, deceiving investors and causing financial losses or reputational damage.

3. What can startups do to protect themselves from deepfakes?

Startups should invest in strong identity verification methods, multi-factor authentication, and AI-powered deepfake detection tools to safeguard their operations.