Rise in deepfake fraud reported by 70% of crypto companies

by Tony Petrov, Chief Legal Officer at Sumsub

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Sumsub, a full-cycle verification platform, releases its ‘State of Verification and Monitoring in the Crypto Industry 2023‘ report. Polina Uzhva, partner marketing manager, Sumsub, provides a summary, focusing on the regulations and verification practices for crypto companies, with highlights from verification performance and identity fraud statistics.

The intention of Sumsub’s report is to provide crypto businesses with a clear understanding of industry verification standards and trends, offering insights into enhancing user experience and improving operations.

To gather direct insights, Sumsub conducted a survey among 100+ crypto companies, and combined its results with expert interviews with professionals in the crypto industry. Overall, 800,000+ fraud attempts were studied for this report. All data was aggregated and anonymised.

Key findings from the report include:

  • Seventy-seven percent of crypto companies observed new fraud patterns and schemes this year, with attack methods becoming more professional.
  • Deepfakes remain a growing concern for the crypto industry, with 70% of crypto companies noting their increasing popularity among fraudsters.
  • In 2023, the number of deepfakes in the crypto industry increased by 128% compared to 2022.
  • Fifty-five percent of crypto companies reported an increase in fraud-related losses – both financial and reputational – connected to applicants.
  • The shift from document-based to non-doc verification solutions is underway in crypto, demonstrating faster verification: between 38 and a rapid five seconds in Brazil, and between 46 and a speedy three seconds in Ghana.

“As the crypto industry continues to evolve, we see a global trend of decreasing onboarding time for crypto users,“ comments Jacob Sever, co-founder and chief innovation officer of Sumsub.

“From 2022 to 2023, verification time nearly halved across all regions, driven by the growing expectation of swifter processes among users. As such, providers face the challenge of complying with increasingly stringent regulations, making solutions such as non-doc verification essential.

“By expediting onboarding processes, crypto firms eliminate the need for users to upload any documents, better allowing providers to keep pace with industry demands and enhance pass rates, all while thwarting the threat of synthetic fraud.”

To download the free ‘State of Verification and Monitoring in the Crypto Industry 2023’ report, visit https://sumsub.com/crypto-report-2023/.

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