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Artificial Intelligence Helps Scammers Hack China’s State Identity Recognition System
03.04.2021 [11:49],
Gennady Detinich

According to Chinese media, a group of two scammers hacked into the Chinese state identification system in the system of generating tax bills. Since 20221, criminals have been creating animated images of people from high-resolution photos and using them to replace video from a smartphone camera. Fraudsters cause damage in excess of $ 76 million. But that’s just the tip of the iceberg of China’s privacy concerns.

Image Source: Shutterstock

China lags far behind many developed countries in terms of cyber security, and at the same time, this country has an extremely high level of penetration of digital technologies among the population. But the Chinese authorities are not sitting idly by: from May 1, new rules for the collection and storage of personal data by mobile applications come into force in the Middle Kingdom. Under the threat of large fines — up to 5% of the annual turnover of companies — it will be forbidden to collect and store a lot of details about users: from personal data to things like taxi routes, videos, games, purchases and more — only 39 categories.

In addition to the increased attention to the collection of personal data, the authorities will have to seriously tackle deepfakes — fake images, video and audio created using neural networks based on data arrays. It is precisely such technologies that have allowed fraudsters to create a solution for deceiving the public service of identity recognition in the tax system for a penny.

Two people who were arrested and against whom the prosecutor’s office opened criminal cases purchased high-resolution photographs of people on the Internet. After that, using applications or even available online services, they created videos with photo animation. Smartphones with jailbroken cameras were used to upload videos to the system. With their help, pre-prepared videos were used to replace the image from the camera, which the system used to identify the user. Thus, the scammers created fake personalities with fake personal data, in whose names tax invoices were issued, and the money was withdrawn through a shell company. It took more than three years to detect and catch fraudsters.

It will take tremendous efforts for the authorities and not only in China to maintain a balance between «convenient» and «safe» in the digital world of the future. But no one promised that it would be easy.

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