Ondato report identifies fake printed ID documents as a favorite tool for crypto fraud

A new report from Ondato, a KYC and AML compliance management firm based in London, finds that digital identity fraud in the crypto sector is most commonly committed using fake documents.

Ondato’s Identity Fraud Report for Crypto Industry 2023 says that 42 percent of criminals committing crypto fraud use printed fake ID documents, most commonly passports, at 38 percent. Identity cards were almost as common, at 36 percent. Driver’s licenses made up 26 percent of attempts.

Other than printed ID documents, document images from other screens and manipulated documents are also used frequently in crypto fraud attempts, at 31 percent and 14 percent, respectively.

Only 5 percent come from failed face biometrics.

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

The report goes into specific details on cryptocurrency fraud, such as when fraud most often occurs (Tuesdays, between 14 and 16 UTC) and the profile of a typical fraudster – “a French man in his late twenties, on his phone on a normal Tuesday afternoon in May, trying to trick the system by printing out a fake passport and attempting to pass it off as real.” France is the most common nationality identified attempting crypto fraud. However, Ondato points out that cases happen globally and that vigilance should be exercised across the sector, given the relative vulnerability of the cryptocurrency system, which prioritizes anonymity.

Keeping up with compliance is not always a simple task. Ondato’s report summarizes AML regulations since 2014, and points out that regulations on crypto are constantly changing and getting updated. The new EU Markets in Crypto Assets (MiCA) regulatory framework, for example, will take effect in 2024, in an attempt to rein in a crypto industry that a French government official compared to the Wild West.

Article Topics

AML  |  cryptocurrency  |  digital identity  |  face biometrics  |  identity document  |  identity verification  |  KYC  |  Ondato