Fraud Exposed: The Cryptocurrency Edition

Cryptocurrency has taken the world by storm. With over 34 million Americans owning a cryptocurrency, the digital currency has transformed the FinTech landscape. But as with any new technology, the rising popularity of cryptocurrency as a payment, investment, and trading method opens a door of opportunities for fraudsters to exploit. 

Unlike payments made via traditional banks, crypto payments are irreversible. While banks help in processing chargebacks for credit cards used illegitimately, there is no such process in place for crypto platforms. The odds of recovering money lost from fraud attacks are slim, which makes creating trust a key priority in the crypto space.

Companies want to create a fair and secure platform for users to trade on. Since users value privacy, it’s in the best interest of crypto apps and platforms to implement the appropriate level of Know Your Customer (KYC) checks that doesn’t send users running to a competitor’s platform. But what this also means is that while users need to be able to trust the platform before making transactions, it’s also vital the platform knows which users to trust. As crypto continues to grow, it’s important to know the fraud risks to look out for.