Capillary Technologies loses over Rs 32 Cr in deepfake cyber fraud

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Capillary Technologies, a customer loyalty and engagement platform, has disclosed that one of its recently acquired overseas step down subsidiaries was hit by a sophisticated cyber enabled banking fraud, resulting in the fraudulent transfer of approximately EUR 3 million (around Rs 32.7 crore) to unauthorised third party bank accounts.
In a stock exchange filing on Monday, the company said the fraud was executed using advanced deepfake techniques, including voice cloning, forged signatures and social engineering to impersonate the company's key managerial personnel (KMPs) and authorise the transfers.
The Bengaluru based company said it has initiated legal and operational measures to recover the funds in coordination with law enforcement agencies, cybercrime authorities and banks. The affected subsidiary is also covered under a cyber and crime insurance policy, and the insurer has been notified. The company is currently assessing the extent of insurance coverage and the eventual financial impact.
Capillary said it has already recovered EUR 0.45 million (around Rs 4.9 crore) after taking immediate action upon discovering the incident. It added that additional funds have been traced and the related bank accounts frozen, reducing the amount at risk, though the exact amount on hold is yet to be determined.
According to the filing, the incident occurred just before the weekend. The company said it prioritized securing the funds and coordinating with banks and investigating authorities, which delayed its disclosure to the stock exchanges.
Capillary also stated that there is no evidence of any compromise of customer data, employee data or its technology infrastructure, and that business operations continue without any material disruption. It added that the incident does not require any changes to its annual or long term business goals at this stage.

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