Protect Your Crypto Business From Fraud

Protect Your Crypto Business From Fraud

Bureau Team
Bureau Team

October 18, 2022

Bureau Team

October 18, 2022

The rapid rise of cryptocurrencies has forever changed the global financial landscape, creating opportunities as well as risks for investors. The entry of new and credible players in the crypto space and the possibilities of blockchain technology have become significant growth drivers for cryptocurrencies. That said,  the rising number of scams in the crypto space has become a cause of concern for investors.

Source: Crystal Blockchain 

Despite blockchain’s reputation for impenetrability, cybercriminals can take over wallets just like any other account. In the last two years, billions of dollars worth of cryptocurrencies have been stolen from exchanges, with 2021 seeing an 81% spike in such scams over 2020.  Since conventional markets do not govern cryptocurrencies, the value of this virtual currency is driven by supply and demand. With less regulatory protection, it has become an attractive destination for investors to either produce significant gains or losses.

Types of Crypto Frauds


KYC/Synthetic/Stolen IDs  

Fraudsters register with  fake ID documents using  fudged or synthetic identities  built from stolen or spoofed  credentials.

Account Takeover 

Risk of loss of funds by good  users due to bad actors  illegally gaining access to  their accounts. 

Transactional Risks

Bad actors cause financial  losses by transferring funds  to other accounts or claiming  illegitimate chargeback.

 Fiat Penny Drop Frauds

Crypto companies deposit a  penny to validate connected  fiat accounts. Fraudsters  register and deregister  multiple times to take  advantage.

Social Engineering, Phishing,  and Vishing 

Scammers commit identity  thefts using sophisticated  social engineering methods  such as phishing and vishing  to access users’ accounts.


Cryptojacking is the unauthorised use of someone  else’s computer to mine  cryptocurrency. Hackers do  this by getting the victim to  click on a malicious link on  an email, website, or ad that  loads the mining code on the  computer. 

        Swim Swap Frauds 

       SIM swap attacks occur  when hackers attempt to  gain access to your phone,  lock you out, and access your  important accounts,          which  may include cryptocurrency  wallets. 

Promotional/Referral Abuse

Fraudsters create multiple  accounts using fake or real  stolen identities to benefit  from promotional offers and  giveaways beyond the limits  set per legitimate user. 

Money Laundering 

Bad elements leverage  cryptocurrencies to launder  unsolicited money. Anonymity  and lack of regulation make cryptocurrencies a  

lucrative facilitator for money  laundering. 


The largely ambiguous regulation of crypto  companies enforces  administrative measures,  fines, or revocation of  licences and additional  permits due to non compliance.

What Makes Cryptocurrency So Attractive To Fraudsters?

Digital Design: Cryptocurrencies have a digital design, meaning that fraudsters only need a computer to attack the victims through phishing or hacking.

Irreversible transactions: Transaction, once done, can only be reversed by the person who received the transaction. If an account is taken over by a fraudster and funds are transferred, then it is nearly impossible to recover those funds.

Decentralisation: Cryptocurrencies are meant to be decentralised, and ownership is highly concentrated, reducing the level of trust that participants have in each other.

Offers anonymity:  Since cryptocurrency is still in the evolving stage, it doesn’t require too much personal information to store or transfer crypto. Transactions could be tracked on the blockchain but fraudsters use multiple wallets to make it harder to identify the owner of those wallets.

How Does Bureau Mitigate Such Frauds?

Having the right checks in place enables financial institutions to combat money laundering and upgrade their anti-money laundering (AML) compliance efforts. Machine learning technology can uncover patterns in crypto transactions that would otherwise go unnoticed by humans, such as detecting the connections between crypto wallets or finding wallets with ties to known criminal activity.

Bureau’s end-to-end user onboarding and fraud prevention platform accurately and seamlessly verifies identities, reduces risk, and stops fraud while promoting compliance and growth, all in real-time. With the help of pre-integrated APIs that intelligently combine insights from hundreds of data sources, including device, identity, email, and biometrics, fraud detection becomes more manageable and accurate. Our easy, no-code, drag-and-drop experience lets operators customise workflows to suit the needs of crypto companies. These workflows consist of rules to approve, deny or flag users for manual review at every critical juncture of the customer journey. It is also possible to create fallback options to support the approve/deny decisions to ensure easy, automated decisions based on your users’ comprehensive risk profile. This risk-based dynamic onboarding process helps you onboard legitimate customers 30% faster and blocks fraudulent users and transactions in real time before they can exploit the system. 

Customise workflows to suit the needs of your business

Risk Mapping With Bureau

Combine available attributes to identify the risk of fraud

Case in point: A large DeFi company in India was having KYC and AML regulation compliance issues. While juggling daily operations, they had to ensure that they performed KYC and kept comprehensive AML and other regulatory checks in place. Since crypto is on the newer side and regulators are not entirely comfortable with it, the firm needed a best-in-class compliance program, including KYC/AML. Such stringent compliance measures took a toll on the user experience, and the DeFi firm faced user drop-offs at every checkpoint.

With Bureau’s no-code identity orchestration platform, the company could create workflows that suited their user journey. They were also able to customise journeys based on the respective risk level of the users. Identity verification workflows were made simple for low-risk users, letting them seamlessly glide through the onboarding process while medium and high-risk users were subjected to additional checks and manual reviews. For example, medium-risk users were required to provide a selfie for verification against the photo in their ID document and a liveness check. As a result, there were 35% fewer drop offs, faster user boarding, and 15% more fraudulent users caught during onboarding. 

Summing Up

As cryptocurrency platforms see a continued rise in new account sign-ups and transactions, it is essential to have an identity verification partner that can identify good customers and reduce friction while safeguarding reputation and compliance. Bureau’s holistic suite of compliance and risk management solutions powers businesses to identify users, comply with policies and prevent fraud. To know more, reach out to us.

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