The Cryptocurrency Conundrum: Deepfake Fraud Soars, Leaving Companies Scrambling

The State of Verification and Monitoring in the Crypto Industry 2023

New Fraud Patterns and Deepfakes on the Rise

The latest report released by Sumsub, a full-cycle verification platform, sheds light on the current state of verification and monitoring in the crypto industry for the year 2023. The report, based on a survey conducted among 100+ crypto companies and expert interviews within the industry, offers valuable insights into the ever-evolving world of regulations, verification practices, and emerging threats.

One of the key findings from the report is that 77% of crypto companies observed new fraud patterns and schemes this year. Criminals are becoming more sophisticated in their attack methods and are adapting to the changing landscape of the industry. Of particular concern is the increasing popularity of deepfakes among fraudsters. The report reveals that 70% of companies have noticed a rise in the use of deepfakes, which are created using artificial intelligence to manipulate or fabricate videos, images, or audio recordings. This alarming trend reflects the challenges faced by the industry in combating identity fraud and impersonation.

Furthermore, the report highlights that the number of deepfakes in the crypto industry has increased by 128% compared to the previous year. This significant spike underscores the urgency for crypto companies to implement robust verification measures to detect and prevent deepfake manipulation.

The Shift to Non-Doc Verification Solutions

The report also addresses the ongoing shift from document-based to Non-Doc Verification solutions in the crypto industry. Non-Doc Verification refers to identity verification methods that do not require users to upload any documents but instead rely on other forms of authentication, such as biometric data or device information. According to the report, this transition demonstrates faster verification processes, with verification times reduced from an average of 38 seconds to as fast as five seconds. Additionally, countries like Brazil and Ghana have seen verification times as quick as three seconds.

Jacob Sever, co-founder, and Chief Innovation Officer of Sumsub, emphasizes the importance of this shift in the industry. He notes that as the crypto industry evolves, there is a global trend towards decreasing onboarding time for users. Faster verification processes are now expected by crypto users, and Non-Doc Verification solutions play a crucial role in meeting this demand. By expediting onboarding processes, crypto firms can enhance pass rates, comply with regulatory requirements, and mitigate the threat of synthetic fraud.

Advice for Crypto Companies

The findings from Sumsub’s report shed light on the challenges faced by the crypto industry in terms of fraud and identity verification. As the industry continues to grow and attract more users, it is crucial for crypto companies to prioritize security measures and implement reliable and efficient verification practices.

First and foremost, crypto companies must stay vigilant and adapt to new fraud patterns and attack methods. The increasing use of deepfakes highlights the need for advanced technologies and algorithms that can detect and flag suspicious activities. Investing in robust fraud prevention solutions and regularly updating security protocols are essential steps to mitigate these threats.

Secondly, the shift towards Non-Doc Verification solutions presents a significant opportunity for crypto companies to streamline their onboarding processes. By implementing these solutions, companies can provide a smoother user experience while ensuring compliance with regulations. However, it is important to strike a balance between speed and effectiveness, ensuring that verification processes remain robust enough to detect fraudsters.

Finally, collaboration and knowledge-sharing among crypto companies are vital. Sumsub’s report confirms that fraudsters are becoming more professional, emphasizing the need for the industry to unite against these threats. Sharing best practices, insights, and experiences with peers can help crypto companies stay ahead of emerging fraud schemes and collectively strengthen the industry’s security measures.

In conclusion, Sumsub’s “State of Verification and Monitoring in the Crypto Industry 2023” report provides a valuable overview of the current landscape of the industry. With fraud patterns continuously evolving and deepfakes on the rise, crypto companies must remain proactive and implement reliable verification solutions to protect both their users and their reputation. By embracing Non-Doc Verification methods and fostering collaboration within the industry, crypto companies can enhance user experience, comply with regulations, and stay one step ahead of fraudsters.