Ondato, a London-headquartered company that streamlines Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, has published a report on identity fraud in the crypto industry that shows that 42% of fraudsters in the crypto industry attempt to trick systems by printing out fake documents. 

This report explores the identity fraud trends in the crypto industry that emerged during the first half of 2023, such as the most common methods fraudsters employ to deceive identity verification systems. Ondato points out that 31% of fraudsters provide document pictures from other screens, and 14% attempt to pass off manipulated documents. 

“With internet safety and easy AML and KYC compliance being our first priority, we must look at fraud attempts in depth. This report is part of our continuous effort to achieve this and educate others in the process,” says Ondato’s co-founder and CEO Liudas Kanapienis.

He also adds that, due to the inherent anonymity of crypto, the industry is susceptible to financial crime. The increased likelihood of fraud attempts in the crypto industry also comes into view. In turn, cryptocurrency providers may experience intense reputational damage and financial loss if AML measures are not taken seriously. 

However, the regulations applied to the crypto industry are constantly changing and getting updated. Among the many regulations that cryptocurrencies have been subjected to, 2023 brought new changes to the industry with the introduction of the MiCA regulation. Set to come into full effect early next year, it is a clear indication that cryptocurrency providers need to examine their AML processes more closely. 

With this in mind, Ondato’s report paints a picture of a stereotypical fraudster and points out tell-tale signs of fraudulent documents that companies need to be vigilant of in order to prevent fraud. Amidst these warning signs, Ondato looks into findings such as the repeated use of passports, how common fraud is amongst men compared to women, the nationality that appears most often in fraud attempts, and others. 

Read more about the latest fraud trends: https://ondato.com/reports/identity-fraud-report-for-the-crypto-industry-2023/