Opinion by: Mike Haley, CEO of Cifas
While the cryptography industry is revolutionizing the world of finance, there is an underlying reality that bubbles below the surface. Having record levels, cryptocurrency scams would have represented $ 9.9 billion in 2024 – 2025 forecasts for even darker reading.
Whether in the form of fraud of “old wines in new bottles”-such as Ponzi and pump-and-dump diets or new typologies of crypto-specific fraud such as poisoning at address-the world fraud epidemic strikes the industry and undermines consumer confidence.
Criminals are increasingly abusing the sector to whiten the products of fraud generated in the traditional finance sector (tradfi). This creates challenges of compliance for companies that follow the pace of the evolution of the rules for whitening money (LMA). After all, almost 90% of crypto recording requests in the United Kingdom fail due to low LMA and fraud checks.
Abuse of the cryptography sector
This abuse of the cryptography sector does not go unnoticed by an industry working hard to clean its image in the eyes of global regulators, many of which begin to regulate the sector beyond the AML perimeter. The efforts of sole proprietorship – such as the signaling tools for industry scam and disturbance operations – as laudable as they may have a limited effect in isolation.
The industry needs a much more daring approach to the sharing of anti-crime data.
Public-private data sharing in the transversal sector to combat fraud quickly becomes the standard in the Tradfi sector. Whether via compulsory anti-SCAM data sharing between financial services and telecommunications operators in Singapore or voluntary regimes led by industry in Australia and the United Kingdom, data sharing is accepted worldwide as one of the main defenses against global fraud.
In relation: Blockchain compliance tools can reduce tradfi costs: Chainlink co-founder
We cannot put a breach in this wave of world crime by joining the points along the fraud value chain. While fraud adapts to the new financial landscape internationally, which is lacking in this chain is the community of digital assets. The introduction of the community in existing data sharing efforts will not only help build a solid ecosystem, but will also benefit the industry itself.
Action Theory
There are three things that industry should do.
First, the current limited use of the crypto as a medium public payment medium means that even the most committed cryptographic criminal cannot exist in isolation. The ramp and the exit of the crypto and the fiduciary currencies are key intervention points in the fight against fraud linked to cryptography. None of the two parties seeing the whole image, do not share data hinders efforts.
Second, the use of crypto in the fraud whitening chain creates an AML challenge. With regulators repressing exchanges and new rules that are starting to bite, industry must build defenses against fraud products. It cannot do it without the essential data flows necessary to identify and prevent individuals from entering their ecosystem, data that it must come from the value chain.
https://www.youtube.com/watch?v=vlickjsip8
Third, while the desire to fight fraud within the community of digital assets increases, compliance as a profession in the sector is an emerging discipline. The industry would benefit from difficult data and the experience of fraud prevention specialists established in other sectors, for which the types of emerging fraud are “as usual”.
While the arguments in favor of the sharing of inter-industrial data to prevent fraud linked to cryptography are clear, which must happen to implement the theory?
Acceleration of collaboration
The United Kingdom offers a potentially hospital political environment for the first incursions of industry in the sharing of transversal data.
From a legal point of view, the British privacy regulator, the information commissioner’s office, recently unequivocally declared that “data protection is not an excuse when fighting fraud and scams”. This is particularly relevant to recent crimes, one of which has seen crooks flying $ 1.2 million by pretending to be the police and the hosts of Crypto Wallet to encourage victims to reveal personal information.
https://www.youtube.com/watch?v=t06mvwz6ngm
Coupled with recent legislative changes in the data privacy regime in the form of the 2025 data law (use and access) – which establishes crime prevention as a “recognized legitimate interest” – the legal argument for sharing could not be clearer.
Then, the regulatory horizon for the regulation of digital assets in the United Kingdom provides carrots and sticks for the prevention of fraud and data sharing. The British Chancellor’s announcement on Future regulations firmly suggest that the digital asset industry will be linked by the same consumer protection rules as the Tradfi sector. It is difficult to imagine consumer protection in the United Kingdom against fraud without an element of sharing of inter-industrial data.
Carrot is also there with the Financial Conduct Authority – and the future regulator of declared digital assets – indicating that data sharing is a key tool in the fight against fraud, product laundering.
Finally, the United Kingdom has an ecosystem for sharing data on rich and established financial crime, with public-private collaboration, intra-industrial and transversal, including through the joint intelligence working group on money laundering. The opening of these initiatives to the digital asset industry has already started, and with government support and regulatory, it could be accelerated.
The community of crypto and digital assets is only too well known the risks of reputation and regulation posed by the urgency of fraud. But recognition alone is not enough and efforts should not remain partitioned. The sharing of inter-industrial data is a key catalyst for effective prevention of fraud worldwide. Given the environment conducive to the United Kingdom, it is particularly placed to show an example.
Opinion of: Mike Haley, CEO of Cifas.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
