Cryptocurrency Scam Artists

The leading security-focused ranking platform that analyzes and monitors blockchain protocols and DeFi projects uncovered a modern tactic used by crypto scam artists as the industry continuously improves scam detection capabilities.

Crypto scam artists have access to a low-cost black market of people accepting to put their identities on fake projects – everything for the low cost of $8.00, blockchain firm CertiK has revealed.

These “Professional KYC actors,” as CertiK has described them, would voluntarily become the face of a crypto project and gain trust in the crypto community before the scam takes place.

These KYC actors would use their identities to open up bank or exchange accounts on behalf of the scam artists.

On November 17, 2022, blog post-CertiK analysts discovered 20 clandestine marketplaces hosted on Telegram, Discord, mobile apps, and gig websites to enroll KYC actors for as low as $8.00. These clear the KYC requirement for opening bank or exchange accounts in a developing country.

Little more expensive jobs require the KYC actor to put their face and name on a fake project. CertiK observed that most of these actors in South-East Asia are paid approximately $20 or $30 per acting job.

Higher asking prices require more complex requirements or verification processes for the KYC actor living in a country at low risk of money laundering.

Some are paid up to $500 weekly if the acting role involves playing as CEO of the fake project. The KYC actor market was minimal compared to the market for the bank or exchange accounts that have already been KYCed, CertiK said.

Conversions from crypto to fiat – or vice versa- are a considerable percentage of transactions on these marketplaces. CertiK calculated over 500,000 members, where buyers’ and sellers’ sizes range from 4,000 to 300,000 on these black markets.

CertiK informed that over 40 websites that claim to vet crypto projects and offer “KYC badges” are ineffective, as the services are too basic to detect scams or insider threats.

The groups behind these websites need the investigation methodology, training, and experience; as a result, scam artists are using these badged to misguide the community and investors.

On the other hand, the industry is fighting back. Mastercard, the payment giant, launched a tool that combines artificial intelligence and blockchain data in October to help find and stop fraud.

It is becoming more difficult for fraudsters to conceal their criminal activities due to the open nature of blockchain transactions. French authorities used on-chain analysis to find and charge five young individuals for allegedly using a phishing website to scam victims out of millions of dollars’ worth of their NFTs.


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