Insurers can no longer treat Bitcoin as ‘toxic asset’ after Musk deepfake scam

Insurers have been told that they can no longer treat Bitcoin as a “niche, fringe asset category” following a deepfake scam.

Last weekend, a deepfake of Tesla co-founder and chief executive, Elon Musk was seen encouraging people to part with their Bitcoin with the promise that it would be doubled during a livestream on YouTube.

A deepfake is video, audio or an image that has been convincingly altered or manipulated to misrepresent someone as doing or saying something that was not actually done or said.

Michael Marcotte, founder of the National Cybersecurity Centre, told Insurance Times that the scam showed Bitcoin had become “mainstream” and that insurers needed to engage with it “properly” to protect consumers’ assets.

“What this scam has highlighted is just how quickly the risk landscape is shifting as new breeds of fraud come into play,” he said.

”Bitcoin is no longer some niche, fringe asset category – it’s mainstream and affects millions of consumers.

“Insurers can’t afford to treat it as a toxic asset and they need to engage with it properly. There’s a potentially lucrative market here to safeguard these assets for everyday investors.”

’New frontier’

Marcotte also felt the scam presented ”a new frontier” for insurers when it comes to fraud, such as deep fakes.

“It is now starkly obvious that we’re moving into a world where the line between real and fake is increasingly unclear,” he said.

“This scam needs to be a radical wake-up call for the rest of the industry.

”This scam was a personal attack on Elon Musk – and he won’t be the last high-profile business figure or celebrity to be targeted.

”Insurers can step in to provide policies protecting these individuals’ digital identities and online authenticity. These would be highly valuable contracts – the first insurers onto this terrain will reap the rewards.”