Cryptocurrency Account Profiles Revealed (Insight from Sumsub's Identity Authentication Study)
In a groundbreaking development, Sumsub, a leading identity verification provider, has released the first-ever identity verification report for the crypto industry. The report, published in June, combined insights from 200 industry experts and analyzed over 100 million identity verification checks.
The report highlights the current identity verification standards in the crypto industry, emphasizing compliance with evolving regulatory frameworks such as the Financial Action Task Force (FATF) Recommendation 16 ("Travel Rule") and anti-money laundering (AML) requirements. Crypto exchanges and Virtual Asset Service Providers (VASPs) are increasingly adopting robust technical solutions that combine regulatory compliance, seamless user onboarding, and fraud detection to navigate complex global standards.
Key standards from the report include:
- Alignment with international AML regulations and the Travel Rule, ensuring transparent transactions and identity verification across jurisdictions, especially in APAC regions like Taiwan, Hong Kong, Singapore, and Japan.
- Adoption of deepfake detection, behavioral intelligence, device intelligence, and fraud network detection to counter fraud including synthetic identities and AI-powered attacks.
- Implementation of smooth remote identity verification (IDV) via mobile apps and SDKs that balance regulatory demands and user experience, facilitating higher approval rates and faster onboarding.
- Emphasis on ongoing transaction monitoring beyond initial onboarding, addressing that 76% of fraud occurs after onboarding, thus promoting continuous compliance and risk management throughout the customer lifecycle.
The report also addresses regional challenges such as fraud doubling globally, with notable deepfake activity in Brazil, illustrating the need for adaptive, multi-layered identity verification systems.
Sumsub's solutions actively integrate regulatory dialogue, technical implementation, and ecosystem collaboration to help crypto businesses meet increasingly stringent compliance and fraud prevention demands while preserving user experience and operational efficiency.
The report did not provide information about the verification practices of users who do not pass the initial check, regardless of their language. However, it is worth noting that younger users, such as the current average, may expect faster verification and user-friendly interfaces.
The report also analyzed user characteristics based on anonymized data, revealing that English, Portuguese, Spanish, Vietnamese, and Russian are the five most popular languages among users of crypto platforms. Portuguese, Spanish, and Russian are all among the five most popular languages, in addition to English and Vietnamese. Greek and Moldovan are two of the ten most popular languages among users, but they are less common than the five most popular languages. The three less popular languages among users, in order, are Polish, Turkish, and Japanese.
Interestingly, the majority of crypto platform users undergo verification between 11 am and 6 pm, weekdays. This peak in activity might be a factor for crypto platforms to consider when managing their server loads. The average age of crypto platform users is currently 30, down from 33 last year.
In summary, the report stresses a multi-faceted approach to identity verification in crypto, combining global compliance adherence, advanced fraud intelligence, and user-centric technology to meet current and future challenges in the digital asset sector.
- Incorporating technology such as deepfake detection, behavioral intelligence, and user-centric mobile apps for seamless remote identity verification may help crypto platforms cater to the expectations of younger users who prefer faster verification and user-friendly interfaces.
- As the crypto industry evolves, it's crucial for education and self-development on topics like financial regulations, compliance, and fraud prevention to ensure individuals have the necessary knowledge to navigate the digital asset sector effectively and maintain a secure lifestyle in their personal finances.
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