New fraud warning in South Africa

Binance, the world’s largest cryptocurrency exchange by trading volume, has warned of a sharp rise in “face attacks” and other AI-enabled fraud in South Africa.

It said cybercriminals now use the same AI tools that power innovation to exploit users. These tools enable more sophisticated deepfake scams, cloned voices, and stolen identities.

According to Binance, over 60% of organisations in South Africa have reported a surge in AI-facilitated financial crimes, which is higher than the global average.

Samukele Mkhize, Binance South Africa’s country compliance head, said this surge was due to several factors.

“South Africa’s rapid digital growth, combined with gaps in cybersecurity awareness and infrastructure, reflects a broader global trend seen across industries,” said Mkhize.

This has made South Africa a hotspot for AI-driven scams such as phishing, identity fraud, and deepfakes.

“At Binance, we proactively monitor these evolving threats and have invested in advanced fraud detection systems, biometric verification with liveness checks, and multi-layered authentication to protect our users.”

Mkhize explained that face attacks, also known as facial recognition attacks, refer to the exploitation of facial biometric systems using fake or manipulated images, videos, or 3D facial models.

These attacks are a subset of deepfake fraud and often target platforms that rely on facial verification, such as crypto exchanges, during the Know Your Customer (KYC) process.

South Africans generally know KYC as “Rica”, so named for South Africa’s legal intercept legislation, the Regulation of Interception of Communications and Provision of Communication-related Information Act.

Mkhize said attackers often harvest facial data from public sources like social media, video calls, or hacked ID documents and use AI to generate realistic fake visuals.

These are then used to impersonate individuals and gain unauthorised access to accounts or complete fraudulent KYC verifications.

“Many exchanges, including Binance, use facial recognition to verify identity during KYC, which makes the integrity of biometric authentication a critical part of protecting users,” said Mkhize.

To combat this, Mkhize said Binance regularly updates its KYC processes to stay ahead of evolving tactics used by malicious actors.

This includes implementing advanced biometric liveness detection, real-time monitoring for suspicious behaviour, and user education around security features such as two-factor authentication (2FA).

“As a reminder, Binance will never ask for your password, private keys, or to send funds in order to claim rewards. Always verify communications through official channels,” he said.

Recovering funds after fraud

Binance said that is AI tools helped recover $88 million (R1.6 billion) in compromised crypto assets in 2024.

Asked what victims could do to maximise the chance of their stolen funds being recovered, Mkhize said it all depends on how quickly the incident is reported and how the scam was carried out.

“In cases where Binance can intervene early, such as stopping a suspicious transaction or freezing assets on-platform, recovery is a possiblity,” he said.

Mkhize said that to maximise the recovery changes, users should:

• Report incidents immediately via Binance’s in-app support centre.
• Provide as much detail as possible, including wallet addresses, transaction IDs, and screenshots.
• Report the scam to local law enforcement and relevant financial authorities.

Where funds are moved off Binance’s platform before action can be taken, it can assist by flagging addresses, working with other exchanges, and providing data to law enforcement globally to help track and potentially recover the funds.

“Additionally, Binance offers an extra layer of protection through the Secure Asset Fund for Users (SAFU) — an emergency insurance fund established in 2018,” said Mkhize.

Binance’s announcement of SAFU over seven years ago quickly became a meme that has persisted through the ups and downs of the crypto market.

“A portion of all trading fees is allocated to SAFU to protect users in extreme cases,” Mkhize explained.

Working with SAPS

Mkhize said that Binance takes a regulatory-first approach and actively collaborates with law enforcement, governments, and financial intelligence units globally, including in South Africa. 

Their efforts include:

• Real-time fraud case coordination through formal channels.
• Over 750 professionals in its global compliance team handle nearly 60,000 law enforcement requests annually, typically responding within 72 hours.
• Training programmes for law enforcement, including over 70 anti-cybercrime workshops in 2023 alone.

“Binance also hosted sessions specifically for South African law enforcement, focusing on identifying crypto-related fraud and AI-enabled scams,” Mkhize said.

“These partnerships help fight money laundering, terrorist financing, and cross-border fraud, enhancing the safety of the entire crypto ecosystem.”