FTX, the second-largest cryptocurrency exchange, went through from bank run to bankruptcy in just a week. FTX improperly transferred customer funds to Alameda, resulting in the collapse of the company. The news dropped a bombshell and caused an enormous impact on the crypto market.
Cryptocurrency is a risky investment market. Not only because of the high volatility, but it is also full of various fraudulent activities. The crypto cybercrime results in the surging financial loss, with $1.9 billion of investor funds lost through the end of July, a 37% increase from last year. Therefore, identity verification, as the first gate of security, becomes the must at the enrollment of cryptocurrency exchanges.
Why can Identity Verification Safeguard Crypto Security?
Crypto is an attractive and lucrative market for fraudsters. There are various types of crypto crime, and the most common fraud attacks are creating fraudulent accounts and account takeover. Fraudsters will use fake ID documents or use images stolen from social media and the dark web to open accounts on crypto exchanges. Further, they may use dynamic media, 2D or 3D masks, or even Deepfake attacks to spoof the facial recognition system and take over other people’s accounts.
Once the fraudsters sign up on the platform, they can use the accounts as a tool for money laundering or illegal transactions. Hence, identity verification is the first line of defense to prevent potential fraudsters from getting into the platform.
How does Identity Verification Defeat Crypto Crime?
Identity verification is known as the best way to help crypto companies defeat crypto crime.
For example, ID verification can detect fake ID cards and make fake documents blocked in the first place. However, the traditional identity verification system usually costs several days to complete the checking procedure. Therefore, combined with AI anti-fraud technology has become the latest trend to upgrade the security level and user experience. Authme ID verification, powered by AI and machine learning, can verify card authenticity by detecting the security features on the card. In addition, the system can provide results in real-time, speeding up the onboarding experience within seconds.
As for account takeover frauds, face matching technology can stop fraudsters from passing the facial recognition system. It utilizes facial comparison technology to verify if the user‘s face matches the one shown in the ID documents. With the development of technology, face matching may not be strict enough to combat advanced identity fraud like masks or Deepfake attacks. Authme combines biometric liveness detection, which can detect the skin texture and blood flow and determine whether the face is authentic. It can effectively prevent spoofing technology.
Users will Regard Identity Verification as Security Assurance
In the face of increasing identity theft, many crypto users have begun to accept the friction of enrollment as the cost of security. Identity verification has no longer the 100% pain point for users; instead, it has become the criteria for whether the trading platform is safe. It is a golden opportunity to have a stronger identity verification system to enhance security and gain customer trust!