Report: Scammers are Buying Dark Web KYC Identities for Crypto Theft

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Scammers are buying KYC information for as low as $8.
“Professional KYC actors” are assuming CEO roles for fraudulent crypto projects.
Most websites that audit crypto projects are “worthless” and “superficial.”

A Certik investigation released on Thursday revealed a thriving underground market where people sell their personal information to fraudsters who commit crypto theft for as little as $8.

Before an “insider hack or exit fraud,” these “professional KYC actors,” as CertiK calls them, could take on the role of the verified face of a cryptocurrency project to gain the trust of the community.

KYC for Hire on the Dark Web

The identities of these know-your-customer (KYC) players are also put to use in other instances, such as when creating bank or exchange accounts in their own names for cryptocurrency scammers.

CertiK found more than 20 dark web markets where KYC actors may be hired for as little as $8 for simple “gigs.” Among these gigs is fulfilling KYC requirements to open a bank or exchange account in a developing nation. There are many ways to access these markets, such as through Telegram, Discord, mobile apps, and niche websites.

For higher-priced jobs, the KYC actor usually has to put their own name and face on a fake operation. As CertiK pointed out, most actors are located in impoverished countries “with an above-average concentration in South-East Asia” and are only paid $20 to $30 each for each task.

It’s possible that stricter KYC criteria or verification processes might come with a higher price tag, especially if the KYC actors in question are locals from countries with a lower risk of money laundering.

CertiK found that the market for KYC actors was “minimal” in comparison to the market for previously KYCed bank and crypto exchange accounts, where positions like CEO for dubious projects could pay up to $500 per week.

There are more than 40 sites that claim to audit crypto projects and give “KYC badges.” However, CertiK has warned that these services are useless because they don’t go deep enough to stop fraud or aren’t good enough to find internal risks.

They also said that the people who work for these websites don’t have the right research skills, training, or experience. This means that scammers could use these certificates to trick the public and potential investors.

On The Flipside

The crypto sector has been fighting back against fraudsters, and they’re starting to make some headway. Mastercard, a conventional financial juggernaut, introduced a fraud detection tool in October that uses AI and blockchain data to detect and prevent fraud.

Why You Should Care

KYC steps are an important part of making the crypto world safer and less risky. Before selecting whether or not to implement KYC standards and processes, organizations should carefully weigh the risks and rewards, where the rewards are realized in the form of a reduction in fraud, money laundering, and identity theft.

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