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How Multi-Institution Bitcoin Custody Protects Against Deepfakes
Jackson Mikalic | Head of Business Development
May 18, 2025
The Threat of Deepfakes in Bitcoin Security
Technology is evolving rapidly. A growing concern for many investors, including those in the Bitcoin space, is the rise of deepfake videos - AI-generated media that can realistically mimic a person's voice, appearance, and behavior.
Deepfakes have existed for several years, but what was once easily distinguishable is now approaching real-time realism. We may not be far from a time when bad actors can generate real-time video or audio impersonations that are nearly indistinguishable from reality. These scenarios raise an important question: how do you protect your Bitcoin from impersonation-based attacks?
Investors are increasingly asking, "Could someone fake my identity convincingly enough to access my account and move funds without my knowledge?"
Why Bitcoin Custody Is Vulnerable to Deepfakes
Bitcoin transactions are final. Once a transaction is sent, it cannot be undone. This makes Bitcoin holders particularly appealing targets for deepfake-based attacks.
Traditional financial institutions often have layers of human review, internal governance, and redundancies that slow down fraud. In contrast, some Bitcoin financial service platforms, especially those designed for retail, may have fewer controls in place. Some of these platforms allow Bitcoin to be withdrawn with minimal authentication, meaning leaked credentials and compromised two-factor codes could result in a full account takeover.
But what about platforms that do use video verification as an additional control mechanism? Are they totally safe from this risk?
How Multi-Institution Custody Defends Against Deepfakes
Multi-institution custody introduces structural safeguards that significantly increase the difficulty of executing deepfake-based attacks. Here's how it works:
- Your Bitcoin is held in a segregated wallet protected by standard credentials and two-factor authentication as the first line of defense
- Three independent institutions safeguard your assets, none of which control your Bitcoin
- Withdrawing funds requires verification with two of the three institutions
- Live interactions are mandatory, and recorded videos or impersonation attempts are not sufficient for the withdrawal process
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