Blockchain security company CertiK has discovered that crypto scammers have been able to hire people in the black market for the modest sum of $8 to mask their identities while they commit fraud.
In a blog post published on November 17, CertiK analysts claimed that they had discovered over 20 underground marketplaces where people could be hired for as little as $8 to complete straightforward “gigs,” such as meeting the KYC requirements “to open a bank or exchange account from a developing country.”
These people, who CertiK refers to as “Professional KYC actors,” would occasionally voluntarily accept the position of the verified face of a cryptocurrency project in order to win over the community’s trust before an “insider hack or exit fraud.” These KYC actors can also be used to open bank or exchange accounts for bad guys using their identities.
More expensive jobs have the KYC actor placing their name and face on a phony enterprise. According to CertiK, the majority of performers appear to be being taken advantage of because they are headquartered in underdeveloped nations “with an above-average concentration in South-East Asia” and receive salaries of $20 to $30 for each job.
Furthermore, if the KYC actors are citizens of nations with low money laundering risks, more demanding criteria or verification procedures might command an even higher asking price.
According to CertiK, the market for KYC actor jobs was “small” in comparison to the market for previously KYCed bank and cryptocurrency exchange accounts. However, some positions are paid up to $500 per week if an actor were to assume the part of CEO for a malicious enterprise.
Conversions from cryptocurrencies to fiat, or vice versa, were also mentioned as making up a sizeable portion of the transactions seen on these marketplaces, according to CertiK, which estimated that more than 500,000 members were buyers and sellers on these black markets with marketplace sizes ranging from 4,000 to 300,000.
Over 40 websites purporting to assess cryptocurrency projects and provide “KYC badges,” according to CertiK, but the services are “worthless” because they are “too superficial to detect fraud or just too amateur to uncover insider threats.”
They continued by saying that the teams behind these websites “without the necessary investigation methodology, training, and expertise,” which means that these badges are then used by con artists to deceive members of the public and investors.
Financial sector strives to curb crypto scam
Having said that, the sector has been working hard and is making progress in its battle against cryptocurrency fraudsters. For the purpose of detecting and preventing fraud, the traditional finance behemoth Mastercard unveiled a technology in October that blends blockchain data and artificial intelligence.
Contrary to popular assumption, it is more difficult for fraudsters to conceal the transfer of money because of the open nature of blockchain transactions.
Another notable example is the work done by French authorities, who used on-chain analysis to identify and prosecute five individuals who stole nonfungible tokens (NFT) through a phishing scheme.
