AI FAKE IDS PASS KYC, XRPLS CONTROVERSIAL CLAWBACK FEATURE, VAST BANK EXITS CRYPTO

Last updated: June 19, 2025, 21:11 | Written by: Caitlin Long

The cryptocurrency landscape is known for its volatility and rapid evolution, and today is no exception.We're facing a confluence of events that could significantly impact the industry's future. The $15 AI-generated fake IDs are reportedly being used to fool crypto exchange identity checks, potentially giving crypto hackers and scammers a new edge.Imagine a world where digital identities are as easily fabricated as a Hollywood movie prop, threatening the very foundation of trust in cryptocurrency exchanges. These fake IDs were used to pass Know Your Customer (KYC) checks on several cryptocurrency exchanges, raising significant security concerns. What Happened: Priced at just $15 eachThis is the reality we're grappling with as AI-generated fake IDs are now reportedly bypassing stringent Know Your Customer (KYC) checks, potentially opening the floodgates to fraud and illicit activities.But that's not all.Ripple's XRP Ledger (XRPL) is stirring up controversy with its newly approved clawback feature, raising concerns about the potential for censorship and centralized control.And adding to the mix, Vast Bank's exit from the crypto space signals a possible cooling of institutional interest or perhaps a strategic shift in the face of regulatory headwinds. Last 24 hours in crypto: AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto Tap the link below and dive into theThis article delves into each of these critical developments, exploring their implications and offering insights into navigating this complex environment.

The Rise of AI-Generated Fake IDs and KYC Vulnerabilities

The integrity of KYC processes is paramount in the crypto industry.These checks are designed to prevent money laundering, terrorist financing, and other illegal activities by verifying the identities of individuals using cryptocurrency platforms. AI-generated fake IDs are now bypassing KYC verification across major crypto exchanges and financial platforms, allowing fraudsters to hide their true identities with alarming ease. A recent investigation by 404 Media uncovered a platform called OnlyFake, which offered AI-generated passports and driver s licenses from 26 countries for just $15 .However, a new threat has emerged: sophisticated, AI-generated fake IDs that are capable of fooling even the most robust KYC systems.

OnlyFake: The $15 Identity Crisis

According to a report by 404 Media, a platform called OnlyFake has been offering AI-generated passports and driver's licenses from 26 countries for a mere $15 each. No two days in crypto are the same, and today is no different as a wave of artificial intelligence-generated fake IDs are reportedly passing crypto exchange KYC checks. Meanwhile, Ripple s controvers Listen to AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto by Rise n Crypto instantly on your tablet, phone or browser - no downloads needed.This alarming development means that anyone, regardless of their true identity or intentions, can potentially create a seemingly legitimate digital persona to access cryptocurrency exchanges and other financial services. tldr; A service named OnlyFake is reportedly selling fake IDs that have passed KYC checks on multiple crypto exchanges for $15 each. These IDs include driver's licenses and passports from various countries and are claimed to be generated using artificial intelligence.OnlyFake's pseudonymous owner, John Wick, has claimed that these IDs have successfully bypassed KYC checks at major exchanges like Binance, Kraken, Bybit, Huobi, Coinbase and OKX.Imagine the possibilities for malicious actors: opening multiple accounts, laundering illicit funds, or engaging in market manipulation, all under the guise of fake identities.

Journalist Joseph Cox, co-founder of 404 Media, even tested the tool himself and successfully bypassed the verification check on OKX. The high-tech, AI-driven fake product has proved convincing enough for in-country Iranians to bypass KYC and create illicit accounts on crypto exchanges. Crystal Intelligence s investigations team employed its special skillset to learn more about how it works and the risks it poses to the onboarding processes of legitimate crypto exchanges.This real-world demonstration highlights the severity of the problem and the urgent need for exchanges and regulatory bodies to address this vulnerability.

Cost: $15 per ID
Types of Documents: Passports, driver's licenses
Number of Countries: 26
Platforms Affected: Binance, Kraken, Bybit, Huobi, Coinbase, OKX (claimed)

How Do These Fake IDs Bypass KYC?

The success of these AI-generated fake IDs lies in their realism.AI algorithms are trained on vast datasets of real identification documents, allowing them to generate images that are incredibly difficult to distinguish from genuine ones.These images can include realistic details such as watermarks, holograms, and even subtle imperfections that are typically found in real documents. Meanwhile, Ripple s controversial feature to allow reversible transactions under certain circumstances on the XRP Ledger has receiv Show Rise n Crypto, Ep AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto -Furthermore, some KYC systems rely heavily on automated image analysis, making them particularly vulnerable to these sophisticated forgeries. Meanwhile, Ripple s controversial feature to allow reversible transactions under certain circumstances on the XRP Ledger has received near-unanimous approval among validators.Further reading:AI-generated fake IDs claimed to pass crypto exchange KYC are selling for $15 Jesse CoghlanSpanish Treasury to seize crypto to pay tax debtsSome of these systems simply compare the ID image to known templates, which these AI-generated IDs easily spoof.

The Implications for Crypto Exchanges and Users

The widespread use of AI-generated fake IDs poses several significant risks to the cryptocurrency ecosystem:

Increased Fraud: Fake IDs can be used to create multiple accounts for fraudulent activities like pump-and-dump schemes or wash trading.
Money Laundering: Illicit funds can be laundered through crypto exchanges by using fake identities to obscure the origin of the money.
Regulatory Non-Compliance: Exchanges that fail to adequately prevent the use of fake IDs may face penalties from regulatory bodies.
Erosion of Trust: The use of fake IDs can undermine trust in the crypto industry, making it more difficult for legitimate businesses to operate.
Data Security Risks: The platforms themselves could become targets, because a motivated hacker could obtain the training data used to create the fake IDs.

What Can Be Done to Combat This Threat?

Addressing the threat of AI-generated fake IDs requires a multi-faceted approach involving technological innovation, regulatory oversight, and industry collaboration. No two days in crypto are the same, and today is no different as a wave of artificial intelligence-generated fake IDs are reportedly passing crypto exchange KYC checks. Meanwhile, Ripple s controversial feature to allow reversible transactions under certain circumstances on the XRP Ledger has recSome potential solutions include:

Enhanced KYC Technologies: Implementing more sophisticated KYC systems that incorporate biometric verification, liveness detection, and behavioral analysis.
AI-Powered Detection: Developing AI-based tools to detect and flag suspicious IDs that may have been generated using artificial intelligence.
Data Sharing and Collaboration: Sharing information about fraudulent IDs and techniques across the industry to improve detection rates.
Regulatory Scrutiny: Increased regulatory oversight of KYC processes and enforcement of penalties for non-compliance.FinCEN is already facing pressure to fully implement the AML Whistleblower Program, which could further incentivize the reporting of KYC violations.
User Education: Educating users about the risks of fake IDs and encouraging them to report suspicious activity.

The Spanish Treasury's decision to seize crypto to pay tax debts further highlights the need for robust KYC processes. Check out this great listen on Audible.com. No two days in crypto are the same, and today is no different as a wave of artificial intelligence-generated fake IDs are reportedly passing crypto exchange KYC checks. Meanwhile, Ripple s controversial feature to allow reversible transactions undeWithout proper identity verification, it becomes challenging for authorities to track and recover assets from tax evaders who utilize cryptocurrency.

XRPL's Controversial Clawback Feature: A Step Towards Centralization?

Ripple's XRP Ledger (XRPL) has long been praised for its speed and efficiency in processing transactions. Last updated on November 14th, 2025 at . A new fear of businesses has been unlocked: realistic fake ID images created by AI. In February 2025 news agencies picked up a story about darkweb app known as OnlyFake which purports to use neural networks to generate fake ID images that can be used to fool remote identity verification tools.However, a recent development has sparked controversy within the community: the approval of a clawback feature.This feature allows the issuer of an XRP token to reverse transactions under certain circumstances, effectively giving them the power to seize funds from users.

What is a Clawback Feature?

In essence, a clawback feature grants the issuer of a digital asset the ability to reverse a transaction and reclaim the asset, similar to how a bank can reverse a fraudulent charge on a credit card. Recent claims about AI-generated fake passports bypassing KYC (Know Your Customer) systems have sparked debates on cybersecurity, identity verification, and AI ethics. A Polish researcher, Borys Musielak, demonstrated a fake passport created using GPT-4o, suggesting it could bypass automated KYC checks.While this may seem like a positive development for security and consumer protection, it raises significant concerns about censorship and centralized control within a decentralized system.

Arguments for and Against the Clawback Feature

Proponents of the clawback feature argue that it is necessary to protect users from fraud and theft.They claim that it can be used to recover stolen funds or to prevent malicious actors from using the XRPL for illegal activities.Furthermore, they suggest that the feature will only be used in exceptional circumstances and that strict safeguards will be put in place to prevent abuse.

However, critics argue that the clawback feature undermines the fundamental principles of decentralization and immutability that are core to the crypto ethos.They fear that it could be used by issuers to censor transactions or to seize funds from users who disagree with their policies.They also worry that the feature could be abused by governments or other powerful entities to control the flow of funds on the XRPL.

The fact that the clawback feature received near-unanimous approval among validators suggests that a significant portion of the XRPL community believes it is a necessary tool for maintaining the integrity of the network.However, the controversy surrounding the feature highlights the ongoing tension between security and decentralization in the crypto world.

Potential Use Cases and Risks

The clawback feature could have several potential use cases:

Recovering Stolen Funds: If a user's XRP tokens are stolen, the issuer could use the clawback feature to reverse the fraudulent transaction and return the funds to the rightful owner.
Preventing Illegal Activities: The issuer could use the clawback feature to prevent the use of XRP tokens for illegal activities such as money laundering or terrorist financing.
Enforcing Smart Contract Terms: The clawback feature could be used to enforce the terms of smart contracts, ensuring that all parties adhere to the agreed-upon conditions.

However, there are also significant risks associated with the clawback feature:

Censorship: Issuers could use the clawback feature to censor transactions that they disagree with, effectively controlling the flow of funds on the XRPL.
Abuse of Power: The feature could be abused by governments or other powerful entities to seize funds from users who are critical of their policies.
Erosion of Trust: The clawback feature could undermine trust in the XRPL, as users may be hesitant to use a system where their funds can be seized at any time.

The Future of XRPL and the Clawback Feature

The long-term impact of the clawback feature on the XRPL remains to be seen.It will depend on how issuers choose to implement and use the feature, as well as the safeguards that are put in place to prevent abuse. Fake IDs generated by AI are claimed to pass crypto exchange KYC and FinCEN feels pressure from Senators to fully implement the AML Whistleblower Program. In the fast-paced world of sanctions Russian accounts have been closed by Turkish banks due to sanctions threat.The XRPL community will need to carefully monitor the use of the clawback feature and ensure that it is not used in a way that undermines the principles of decentralization and immutability.

Vast Bank Exits Crypto: A Sign of Changing Tides?

Vast Bank, a small Oklahoma-based bank, has announced its decision to exit the crypto space.This move, while seemingly isolated, could be indicative of broader trends in the banking industry and its relationship with cryptocurrency.

Why Did Vast Bank Exit Crypto?

While the specific reasons for Vast Bank's exit have not been publicly disclosed, several factors may have contributed to the decision.These include:

Regulatory Uncertainty: The regulatory landscape for cryptocurrency is still evolving, and banks face significant uncertainty about how to comply with existing and future regulations.
Risk Management Concerns: Cryptocurrency is a volatile and risky asset class, and banks may be hesitant to expose themselves to the potential losses associated with crypto-related activities.
Compliance Costs: Complying with KYC, AML, and other regulatory requirements can be costly and time-consuming, particularly for smaller banks.
Market Conditions: The recent downturn in the crypto market may have made it less attractive for banks to invest in crypto-related ventures.

The Broader Implications for the Crypto Industry

Vast Bank's exit from crypto could have several implications for the broader industry:

Reduced Institutional Investment: If other banks follow suit, it could lead to a reduction in institutional investment in cryptocurrency, potentially dampening market growth.
Increased Scrutiny of Crypto-Friendly Banks: Regulatory bodies may increase their scrutiny of banks that are actively involved in the crypto space, potentially leading to stricter compliance requirements.
Shift Towards Decentralized Finance (DeFi): The exit of traditional banks from crypto could accelerate the shift towards DeFi, as users seek alternative financial services that are not subject to the same regulatory constraints.

What Does This Mean for Crypto Users?

For crypto users, Vast Bank's exit may not have a direct impact in the short term.However, it is a reminder that the relationship between traditional finance and cryptocurrency is still evolving and that there are risks associated with relying on traditional institutions for crypto-related services. A new AI-based tool now allows people to create realistic fake IDs within minutes for $15, as reported by 404 Media. Interestingly, Joseph Cox, co-founder of 404 Media and journalist, tested the tool and successfully bypassed the verification check on OKX.Users should consider diversifying their holdings and exploring alternative options such as DeFi platforms and self-custody wallets.

Conclusion: Navigating the Shifting Sands of Crypto

The cryptocurrency landscape is constantly changing, and the recent developments surrounding AI-generated fake IDs, XRPL's clawback feature, and Vast Bank's exit from crypto highlight the challenges and opportunities that lie ahead. Escucha y descarga los episodios de Rise n Crypto gratis. No two days in crypto are the same, and today is no different as a wave of artificial intelligence-generated fake IDs are reportedly passing cryptoHere's a recap of the key takeaways:

AI-generated fake IDs pose a significant threat to KYC processes and the integrity of the crypto industry. Last 24 hours in crypto: AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto 👀 Tap the link below and dive into the latest crypto headlines with Rise'nEnhanced security measures and collaboration are crucial to combat this evolving threat.
XRPL's clawback feature raises concerns about centralization and censorship, highlighting the ongoing tension between security and decentralization in the crypto world.The feature's implementation and use must be carefully monitored to prevent abuse.
Vast Bank's exit from crypto could be a sign of changing tides in the banking industry and its relationship with cryptocurrency.It underscores the need for regulatory clarity and robust risk management practices.

As the crypto industry continues to mature, it is essential to stay informed, adapt to changing conditions, and advocate for responsible innovation. Last 24 hours in crypto: AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto Tap the link below and dive into the Last 24 hours in crypto: AI fake IDs pass KYC, XRPL s controversial clawback feature, Vast Bank exits crypto 👀 Tap the link below and dive into theOnly through collaboration, vigilance, and a commitment to ethical practices can we ensure the long-term success and sustainability of the cryptocurrency ecosystem.By understanding these critical issues – AI fake IDs pass KYC checks, the implications of XRPL's controversial clawback feature, and the potential domino effect of Vast Bank exiting crypto – we can all contribute to a more secure and transparent future for digital finance.