The Impact of Artificial Intelligence on Crypto-Security

Isn’t artificial intelligence (AI) a hot topic again? You most certainly heard about ChatGPT introduced by OpenAI in 2022.

Whilst AI is helping school kids write their essays and is even replacing some of the customer service functions in the form of chatbots, we decided to look at AI’s influence on the crypto industry and its security.

This article is about the challenges posed by AI-enabled attacks on crypto platforms, and whether AI is really so intelligent that it can possibly protect us from having our crypto wallets hacked.

AI-Based Attacks

AI opens incredible opportunities to companies and consumers in the crypto industry.

Unfortunately, hackers can also benefit from the availability of this technological advancement and put users’ funds at risk in various ways.

For example, sophisticated hacker attacks can be performed by identifying patterns that reveal weaknesses in computer software and security programs.

Another typical cyber attack mentioned in this CNBC article is about phishing emails that spread malware and collect important information. Such attacks commonly happen to well-known digital asset custodians and their employees.

They can easily be performed because of the availability of personal data across social media platforms.

Advanced AI-powered malware gets into computer systems and stays there for weeks and months until enough information is collected to implement the attack, so that’s harder to catch. This is when defense systems (also powered by AI) come into play.

Enhancing Security With AI

First and foremost, preventing attacks starts with researching past attacks and their patterns. AI can help determine hackers’ behavior and analyze their timing, methods, and in which order of steps they move.

Using AI to go through past transactions helps find patterns that might indicate fraudulent activities, and significantly reduce the time spent on identifying threats.

According to this recent article by Forbes, machine learning (ML), which is part of the AI technology class, is being widely used to improve smart contracts’ resilience to cybersecurity attacks.

Smart contracts can be optimized by improving the security of their interactions with other smart contracts, establishing proper testing, and defending against front-running invasions.

This is important because smart contracts are the engine behind most Decentralized Finance (DeFi) platforms, and mitigating vulnerabilities in their infrastructure is key to successfully acquiring more users.

Furthermore, with the help of AI, it became possible to automate or semi-automate responses to certain attacks and security incidents.

These prompt reactions to hackers’ behavior can sometimes determine the future of an entire company and, therefore, security teams of all crypto exchanges and custodians are constantly working on enhancing their defense systems.

And finally, strengthening the authentication process and providing better user identity verification helps withstand attacks better and possibly prevent them. Tracking down malicious actors at the very beginning of their interaction with the platform is essential.

Even just running checks of users’ wallets history with tools, such as AMLBot, becomes incredibly helpful when it comes to identifying potential danger.

Conclusion

AI is a great tool that is widely used in many industries, including digital assets. It became necessary to understand the risks posed by AI-based attacks and build resilient defense systems to predict and prevent them.

The AMLBot team, along with crypto exchanges, custodians, asset managers, liquidity providers, and other ecosystem participants across the globe, work hard to enhance their security with AI technology.

In the end, AI plays an important part in helping guard their users' information and assets day and night.