Sumsub Calls Out Alarming Increase In Fraudulent Activity In Crypto
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Sumsub has published the “State of Verification and Monitoring in the Crypto Industry 2023” report. This report seeks to give crypto firms the necessary tools and information on verification standards and practices.
The report seeks to aid in identity verification and fraud prevention. The two issues have raised concerns across the cryptocurrency industry.
Sumsub, a full-cycle verification platform, noted a significant increase in the use of deepfakes to enable fraudulent activity in the crypto industry.
Taming Fraudulent Activity In Crypto
Sumsub is a platform that gives investors a full-cycle verification platform protecting a user’s entire journey. The platform handles functions such as KYC and transaction monitoring.
Sumsub is available to over 2,000 clients across different sectors, such as crypto, e-commerce, and fintech. It also features a comprehensive verification system to improve the customer onboarding process and guarantee compliance and fraud prevention.
The report’s findings revealed that 77% of crypto firms reported some form of fraud this year. Moreover, the techniques used by scammers have also become more sophisticated. 70% of the companies involved in the survey admitted to a rise in deepfakes.
In 2023, there was a 128% increase in the use of deepfakes to enable fraudulent activities compared to 2022. 55% of the companies surveyed also reported a rise in fraudulent financial activity and reputational loss.
Fast Onboarding Process
Sumsub’s co-founder, Jacob Sever, commented on these findings, saying the crypto industry’s growth had led to a global drop in the onboarding time for crypto users.
“Non-Doc Verification is becoming essential in balancing rapid onboarding with stringent regulatory compliance. This method eliminates the need for document uploads, helping providers keep up with industry expectations while combatting synthetic fraud,” Sever said.
The report further said that the average verification time had dropped by nearly half in 2023 compared to 2022. Fast onboarding processes benefited users but posed a major challenge, making it easy for fraudsters to join the industry.
The report also highlighted one trend where users were not required to submit document uploads. Users could also be verified within seconds.
The staggering increase in fraudulent activities related to deepfakes has triggered alarms across the crypto sector. Fraudulent players are employing professional and sophisticated strategies. Therefore, platforms must maintain secure and compliant operations.
