Ask Sumsubers: What are Some Popular Crypto Fraud Schemes that Popped Up This Year?

Time to talk with Sumsub’s Head of Business Development about common crypto fraud schemes.

Anastasia Shvechkova

Head of Business Development

Sumsub keeps getting questions from our followers about the specifics of regulatory compliance, verification, automated solutions, and everything in between. We’ve therefore decided to launch a bi-weekly Q&A series, where our legal, tech, and other experts answer the most frequently asked questions. Check out The Sumsuber and our social media every other Thursday for new answers, and don’t forget to ask about the things that interest you.

This week, our Head of Business Development, Anastasia Shvechkova, will briefly discuss common crypto fraud schemes.

Follow this bi-weekly series and submit your own questions to our Instagram and LinkedIn.

In 2023, we can identify a substantial shift towards more personalized crypto scams. Typically, criminals befriend victims on social media or dating apps, persuading them to invest in fraudulent cryptocurrency projects or other scams.

AI-generated profiles are another emerging problem, as it’s becoming increasingly more difficult for users to see the difference between what’s fake and real. That’s when AI solutions specifically designed to recognize artifacts on fake profiles come in handy.

Crypto mulling is another issue, where seemingly innocent people—or “mules”—are recruited by criminals to launder illicit funds. Mules usually have a clean banking history and no criminal record, allowing them to move criminal money without getting noticed. Money mules are recruited through online job offers, dating sites, or darknet forums. Recruiters can lure individuals by promising easy money or creating job adverts that appear like legitimate offers.

These cases highlight the importance of a comprehensive approach to fraud protection. Even with advanced deepfake detection systems, fraudsters can manipulate individuals who willingly undergo Know Your Customer (KYC) verification. To effectively address this issue, a multi-layered approach that includes transaction monitoring and behavioral anti-fraud measures is crucial.

If you want to learn more about verification, crypto, and how Sumsub has been targeting these issues, hit this link for insights and useful statistics from 2023.