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Crypto thefts explode; report says users will tolerate ID verification friction to stop it

Crypto thefts explode; report says users will tolerate ID verification friction to stop it

A survey paid for by a digital ID verification company indicates that at least 70 percent of cryptocurrency users are more worried about cybercrime and are more skeptical of firms they are working with.

That is a challenge for buyers and sellers in identity verification – not to mention cryptocurrency markets. Fear, uncertainty and doubt do more to stifle industries than regulation.

And there is reason for unease.

At the recent Global Anti Scam Summit in the Netherlands, industry vendors had a scary message: People are being hit hard by crypto scams. Even if their statistics are weighted by hype, alarm bells should be ringing.

A sales executive from Group-IB, a Singaporean cybersecurity company attending the conference, said the scams globally have increased 335 percent comparing the first half of this year to the first six months of 2021.

In Singapore alone, police have reported that alleged crypto scams have increased 500 percent since 2019, according to Asia-Pacific news publication The Straits Times, which covered the conference.

The Straits Times quotes Group-IB statistics indicating that 2,000 internet crypto scam domains were identified from January to June this year.

And, as feared, deepfakes of celebrities are being used and are effective.

According to The Straits Times, there were 20,000 views for each deepfake come-on. From just February 16 to 18, there were 281 fraud-involved transactions that reaped a total of US$1.68 million.

Trulioo argues identity verification presents opportunity

Trulioo‘s ID verification report, then, is timely.

The company hired Insight Avenue to conduct research this summer. It surveyed 5,000 consumers in the United States, United Kingdom and Singapore, all of whom had opened online finance-related accounts in the previous two years.

Researchers found that 70 percent of respondent feel at greater risk of cybercrime than they had two years prior. Three-quarter of survey takers they feel they are more conscious of possible crime when they work with a company online.

People in cryptocurrency have begun to accept friction at enrollment as a cost of doing business unthreatened by online thieves.

That is good news for industry customer support staff who have to calmly explain why so much information is needed of a customer. It also provides a path for crypto service providers to differentiate themselves through identity verification.

But that is a group of consumers who have been in cryptocurrency for up to two years. Newcomers will likely want more-automated and efficient remote onboarding and ongoing digital experiences.

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