As deepfake scams become more common online, cryptocurrency exchanges are working hard to find ways to tell the difference between real people and hyperreal AI imposters. Kraken, one of the world’s biggest and most regulated crypto exchanges, is now taking part in this fight. They are trying out a new authentication system from Eightco called INFINITY that is meant to make it hard for AI to change who you are.
Kraken’s Push for More Intelligent Compliance
Kraken’s choice to test Eightco’s INFINITY platform shows that crypto exchanges are feeling more pressure to improve security and compliance as rules change. The company has 12 licenses and registrations in major jurisdictions, such as the U.S. (FinCEN) and Canada (FINTRAC). All users must go through strict KYC (Know Your Customer) checks.
The European Union’s Transfer of Funds Regulation, which enforces the “Travel Rule” for crypto transactions, also went into effect on December 30, 2024. This rule says that every transaction must include information about the sender and receiver. This makes things harder for platforms that work in more than one jurisdiction.
Kraken’s pilot is mostly about its U.S. operations, but identity verification problems now affect exchanges all over the world. This makes them rethink how they verify users in an AI-driven world.
Deepfakes Are Ruining KYC as Usual
AI is not only driving new ideas; it is also making fraud more complicated. Blockchain analytics reports say that AI-generated identities made up 28% of all fake exchange registrations in 2024. Even more worrying, 60% of deposits into scam wallets came from schemes that used AI-generated voices, personas, or documents to make them look better.
Deepfake technology lets criminals copy real people’s faces and voices, which most exchanges use to check IDs and faces. Eightco’s INFINITY system says it can change the game here.
What Sets INFINITY Apart
Eightco calls INFINITY a “trust layer” that works directly within applications instead of being a separate verification checkpoint. In theory, that means verification happens all the time and in context, as part of the user experience instead of just at the sign-up step.
The company hasn’t given out any detailed technical specs, but they say that INFINITY is “AI-resistant,” which means it might be able to tell if a user is a real person or a fake digital person. But no one knows how much the technology will cost, how well it will work with other technologies, or what the success criteria will be. Kraken also wouldn’t say if the test is for all users or just a small group of them.
Authentication: A High-Stakes Market
Eightco wants to do a lot more than just crypto. The company says its technology is aimed at the $35 trillion financial services industry and the $500 billion crypto treasury market. It wants to grow into gaming, e-commerce, energy, and healthcare over time, but it hasn’t announced any real partnerships yet.
Notable investors in the company include BitMine, Wedbush, CoinFund, FalconX, GSR, Pantera, Brevan Howard, and Kraken itself. Eightco has a Worldcoin treasury as one of its digital assets. This suggests that it is in line with the larger trend towards proof-of-personhood technologies.
Competing in a crowded field
Okta, Ping Identity, Onfido, and iProov are some of the biggest names in the identity verification business. They use biometric and behavioural analytics to find fraud. How well INFINITY can beat these established players in real life, especially when it comes to advanced deepfake and AI-generated attacks, will determine how well it does.
Kraken Will Face Problems
Using advanced authentication does come with some costs. Kraken already has more than a quarter of its employees working on compliance, which is a big cost for any exchange. Adding new verification layers could put even more strain on resources unless the INFINITY system works very well and is easy to use.
The exchange hasn’t given any information about how to measure the pilot’s success, so it’s not clear how performance, user experience, and fraud prevention will be measured.
Why This Is Important
The question “Who’s really behind the screen?” has never been more important as AI deepfakes become more believable. Identity verification is a must for both trust and regulation in crypto, where privacy and financial freedom come together.
If Kraken’s INFINITY pilot works, it could be a big step forward for AI-proof digital identity and set new standards for how humans are verified in decentralised systems. But the crypto world will be watching and waiting to see if this new technology can really outsmart the machines until the results are made public.
