Sumsub releases “State of Verification and Monitoring in the Crypto Industry 2023” report
“As the crypto industry continues to evolve, we see a global trend of decreasing 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.”
Identity verification and fraud prevention are increasingly concerning issues in the cryptocurrency sector. A new report by Sumsub, a full-cycle verification platform, reveals a disturbing uptick in the use of deepfakes for fraudulent activity within the industry.
Released today, the “State of Verification and Monitoring in the Crypto Industry 2023” report aims to equip crypto firms with vital data and trends on industry verification standards and practices.
Sumsub provides a full-cycle verification platform that protects the entire user journey, from KYC to transaction monitoring. The company services over 2,000 clients across various sectors, including fintech, crypto, and e-commerce. Sumsub’s comprehensive verification suite aims to boost customer onboarding while ensuring compliance and fraud prevention.
128% increase in deepfakes for fraud
The report’s key findings are both alarming and insightful:
- 77% of crypto firms reported encountering new types of fraud this year, with techniques becoming more sophisticated.
- Deepfakes are increasingly popular among criminals, with 70% of surveyed companies acknowledging their rise.
- A startling 128% increase in the use of deepfakes for fraud was observed in 2023 compared to the previous year.
- 55% of companies experienced an increase in fraud-related financial and reputational losses.
- A noteworthy trend is the industry shift from document-based verification to faster Non-Doc Verification solutions.
Jacob Sever, co-founder and Chief Innovation Officer of Sumsub, commented, “As the crypto industry continues to evolve, we see a global trend of decreasing 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.”
The double-edged sword of fast onboarding
The data from the report indicates that the average verification time across crypto platforms has almost halved from 2022 to 2023. While expedited onboarding processes benefit users and businesses alike, they also pose a challenge: faster onboarding could potentially make it easier for fraudsters to penetrate the system.
One notable trend outlined in the report is the move toward Non-Doc Verification solutions, which require no document uploads and can verify a user in as little as five seconds. This is particularly prominent in Brazil and Ghana, where verification times have been cut from 46 to just three seconds.
The alarming increase in deepfake-related fraud is setting off alarm bells throughout the crypto industry. With fraud patterns becoming more professional and sophisticated, the task of ensuring secure and compliant operations becomes even more daunting.
