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Report Reveals Cryptocurrency Sector Faces Surge in ID Fraud Attacks

The Q2 2023 Global Identity Fraud Report by identity verification firm AU10TIX highlighted the cryptocurrency and trading sectors as primary targets for identity fraud.

The AU10TIX report says the cryptocurrency and trading sectors industries faced a staggering 47% of all ID fraud attacks in the second quarter of the 2023 – noting that the allure of high profits and the inherent anonymity of cryptocurrency transactions have made them a magnet for professional fraudsters.

The comprehensive report, which analyzed millions of transactions across 249 countries, found a 44% spike in organized ID fraud in North America alone. This surge is attributed to the region’s economic recovery and inflation, especially in the US, which seems to have emboldened professional ID fraud syndicates.

Attacks By Industry Sector

Attacks By Industry Sector. Source AU10TIX

While North America grapples with this surge, the Asia-Pacific region has been identified as the top hotspot for fraudsters. A concerning 4.0% of transactions in this region were flagged as ID fraud attacks. AU10TIX points to the historically weaker anti-fraud defenses in Asian markets, making them attractive ‘soft targets’ for malicious actors. In comparison, South American entities reported a lower 2.0% attack rate, credited to their rigorous ID verification against government databases.

Payments and commerce sectors followed the cryptocurrency industry, with 32% and 12% of attacks respectively. In contrast, banking saw a mere 2% of attacks, suggesting that financial institutions might be investing more in protective measures compared to other sectors.

The report also offered insight in the documents most commonly used in identity frauds – revealing a significant focus by fraudsters on the misuse of Permanent Residency Cards. A striking 22% of all Permanent Residency Cards submitted for identity verification in Q2 were identified as counterfeit by AU10TIX. This is a notable increase from Q1, where passports dominated the counterfeit list at 28%, while Permanent Residency Cards were at 20%.
Most Forged Documents

Source AU10TIX

AU10TIX says there are two main reasons what Permanent Residency Cards are becoming popular targets for fraud

  1. They are easier to Forge: Permanent Residency Cards are perceived to have simpler security features compared to more intricate IDs like passports. This makes them a more accessible target for counterfeiting.

  2. Reduced Scrutiny: Due to lesser familiarity with Permanent Residency Cards, they typically undergo less rigorous checks during verification processes. Fraudsters capitalize on this oversight, exploiting the gaps in attention to detail.

Ron Atzmon, AU10TIX’s founder and active chairman, is set to delve deeper into these findings during his presentation, "The Geography of Fraud," at the upcoming Money 20/20 USA event in Las Vegas.


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