The crypto sector , traditionally a hotbed of organized fraud , has shrunk by 51% in anticipation of new EU rules.
TEL AVIV, Israel , Dec. 13, 2023 /PRNewswire/ -- AU10TIX , a global technology leader in identity verification and management, today released its data-driven Identity Fraud Report for the third quarter of 2023, which covers 249 million transactions processed in 249 countries organized from July to September 2023. Reveals important trends in the world of identity fraud . More importantly, AU10TIX found that professional fraud networks have shifted their focus from cryptocurrency to the payment sector. The digital payments industry saw an alarming 56% increase in fraud , while the crypto industry , usually a haven for fraudsters, saw an extraordinary 51% decrease.
AU10TIX linked this event to the launch of the EU Market Regulation (MiCA) for crypto-assets in June. The legislation will end the "Wild West" era of cryptocurrencies in the EU and introduce a new regulatory framework designed to protect investors and consumers.
While these new rules are primarily for the EU and won't come into force until 2024, many organizations and regions are actively adopting stricter KYC rules to comply with the law. This makes it difficult for professional criminal organizations to commit fraud in the crypto sector , so they focus their efforts on less regulated payments.
Among the sectors surveyed in the third quarter, the payments sector was the most targeted by organized fraud groups, accounting for 51% of all financial fraud attacks, up significantly from 32% in the second quarter. In contrast, the crypto industry accounted for only 23% of attacks, down from 47% in the second quarter. These findings highlight a clear relationship between the regulatory framework and the propensity to commit fraud .
North America recorded the highest number of attacks on the payment sector of all regions studied. AU10TIX explains that fraudsters have taken advantage of the economic recovery and increased spending. Asia-Pacific is the second most targeted region, which AU10TIX says is due to the increasing complexity of digital transactions (involving multiple countries and cross-border payments), creating challenges in identity verification and loopholes for fraudsters.
The AU10TIX report compared the frequency of different fraud methods, including document numbers, personal information, facial images, image templates and selfies. Across the region, selfie-based fraud accounted for less than 5% of attacks, indicating that it is difficult for fraudsters to bypass this verification method. Gartner also noted that facial image capture is a must for identity verification service providers.
"The unfortunate truth is that publicly available identity fraud statistics only show attacks that can be detected with traditional IDV solutions," said Dan Ereshalmi , CEO of AU10TIX. "The current level of fraud is probably three to ten times higher due to the sophisticated attacks of today's organized crime groups, which use artificial intelligence, deep forgery and other technologies to create fake identities that are almost indistinguishable from real ones. A company's financial health and reputation could be seriously affected by the prevalence of sophisticated identity fraud . Our commitment at AU10TIX remains unwavering to help reduce identity fraud worldwide and make the world a better place.”
A significant increase in the number of attacks on the payment sector, especially in North America , highlights the urgent need to strengthen legislative measures to protect consumers from fraud. Regulators in the US and Asia Pacific should proactively adopt legislation that will strengthen consumer protection in the payments industry.
In the absence of stricter regulations, payment providers should improve their KYC practices to strengthen protection against the growing risk of fraud . AU10TIX is committed to building a safe and sustainable financial ecosystem and invites stakeholders to collaborate in this important work.
About AU10TIX
AU10TIX, a global leader in identity technology headquartered in Israel , is on a mission to eliminate fraud and build a safer and more inclusive world. The company provides modular solutions critical to verifying and connecting physical and digital identity so businesses and their customers can trust each other. Over the past decade, AU10TIX has become the preferred partner of major global brands in automated customer registration and verification and continues to strive to be aware of the role of the individual in society. AU10TIX's patented technology delivers results in less than 8 seconds, enabling businesses to engage customers faster, prevent fraud , meet compliance requirements and, most importantly, improve trust and security. AU10TIX is a subsidiary of ICTS International NV (OTCQB: ICTSF ). Visit AU10TIX.com for more information.
Media contact:
Mark Prindle
Fusion PR
au10tix@fusionpr.com
To download multimedia, visit original content: https://www.prnewswire.com/news-releases/au10tix-q3-global-identity-fraud-report-uncovers-56-surge-in-pay-sector-correlated-with- unprecedented -drop-in-crypto-302013820.html
AU10TIX RESOURCES LIMITED