Crypto scammers have discovered a "cheap and easy" black market of individuals willing to put their name and face on deceptive projects for the low price of $8, according to blockchain security firm CertiK.

CertiK describes these individuals as "Professional KYC actors," and they would voluntarily now become the verified faces of a crypto project in some cases, gaining trust in the crypto community prior to an insider hack or exit scam.

Other uses for these KYC actors include opening bank or exchange accounts on behalf of bad actors.

CertiK analysts discovered over 20 underground marketplaces held on Telegram, Discord, mobile apps, and gig webpages to recruit KYC actors for as little as $8 for simple "gigs" such as passing the KYC requirements to open a bank or exchange account from a developing country, according to a Nov. 17 blog post.

The KYC actor puts their names and faces on fraudulent project in higher-paying jobs. According to CertiK, most actors appear to be exploited because they are based in developing countries with an above-average concentration in South-East Asia and are paid $20 to $30 per role.

Meanwhile, more complex demands or verification processes may command a higher asking price, especially if the KYC actors are residents of low-risk money-laundering jurisdictions.

Conversions from crypto to fiat — or vice versa — were also viewed as a key percentage of the transactions seen on these marketplaces, with CertiK calculating that over 500,000 members in marketplace size varying from 4,000 to 300,000 were sellers and buyers on these black markets.

Over 40 websites claiming to vet crypto projects and offer KYC badges are worthless, according to CertiK, because the services are "too superficial to detect fraud or simply too amateur to detect insider threats."

They also stated that the teams behind these websites lack the required investigation methodology, training, and experience, implying that scammers then use these badges to mislead the community and investors.

Having said that, the industry has been working very hard and is making progress in its fight against cryptocurrency scammers. Mastercard released a tool in October that combines artificial intelligence and blockchain data to aid in the detection and prevention of fraud.

Contrary to common belief, the open nature of blockchain transactions makes it more difficult for fraudsters to conceal funds' movement. Another recent example is the work of French authorities, who used on-chain analysis to identify and charge five people who stole nonfungible tokens (NFT) via a phishing scam.

How do you think we can better protect ourselves from crypto scams? Drop your comments by sharing this article on social media.

Posted 
Nov 18, 2022
 in 
Crypto News
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