KYC Verified Accounts Make Up Three-Quarters of Fraudulent Crypto Transactions

Know Your Customer-verified accounts make up more than three-quarters of fraudulent crypto activities, a stunning new report claims.

Data from nSure.ai shows that up to 76.5% of cryptocurrency scams involve accounts verified by KYC – which were once considered entirely trustworthy by the crypto community.

What is ‘Know Your Customer’ (KYC)?

For the same reason that traditional banks require ID verification before allowing you to use their services, the world’s largest cryptocurrency exchanges also require users to verify their identities.

KYC is an abbreviation for “know your customer” (KYC) and is the term used to describe the process by which a customer’s identification is confirmed and verified.

Documents such as a government-issued photo ID or passport and bills showing your current address are necessary for the identity verification process. Whenever a new account is opened, or there is a change to an existing one, the customer is asked to provide their identification documentation.

The process of KYC can be broken down into steps:

• Customer Registration: The customer must provide their details and contact information to the company. The company will verify this information to ensure it matches what’s on file with public databases.
• Customer Identification: The customer must provide identification documents such as a driver’s license, passport, or national ID card. The company will verify these documents to ensure they are authentic and belong to the customer.
• Customer Acceptance: After verifying all of the customer’s KYC, brokers and crypto exchanges approve the account for trading.

The purpose of KYC is to prevent criminals from using a company’s services for illegal purposes, such as money laundering or terrorist financing.

nSure.ai on a Mission to Improve the KYC Process

First-time customers account for 87% of blocked transactions, stymying merchant recruiting efforts and substantially boosting marketing expenses. Even more concerning is that 76.5% of defrauding transactions originated from KYC-verified accounts.

Therefore, online cryptocurrency exchanges are collaborating with nSure.ai, the world’s first completely automated chargeback guarantee platform, to ensure the safety of their transactions and eliminate manual, time-consuming steps in their KYC procedures.

nSure.ai is the first company in the digital goods market to build an algorithm that employs user behavior, contextual analysis, and a multivariate detection system to determine whether or not a transaction is fake.

This will make it easier for businesses to onboard a massive number of people while weeding out fraudsters with more nuanced identities.

According to Alex Zeltcer, co-founder and CEO of nSure.a:

“Fraud should not be accepted as a standard part of conducting business. By removing this barrier, we reduce the friction caused by existing anti-fraud measures and boost revenues… Familiar with the crypto space, purchasers will immediately benefit from a more streamlined authentication process allowing companies to recognize a much higher transaction volume.”

Crypto exchanges are eager to adopt this technology after seeing its popularity in the travel, gaming, and digital goods industries, where swindlers have infinite tactics to fool merchants.

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Read more: The Ultimate Checklist to Build an Effective e-KYC Solution