Many cryptocurrency scammers have been accessing a “cheap and easy” black market of individuals willing to put their name and face on fraudulent projects, all for the low price of $8, as blockchain security company CertiK has discovered.
These individuals, described by CertiK as “professional KYC actors” would, in some cases, willingly become the verified face of a crypto project.gaining the trust of the cryptocurrency community before an “internal hack or exit scam.”
Other uses of these KYC actors include using their identities to open bank or exchange accounts on behalf of the bad actors.
According to a post from the post on November 17, CertiK analysts were able to find over 20 underground marketplaces hosted on Telegram, Discord, mobile apps, and gig websites to recruit KYC performers for as little as $8 for simple “gigs” like passing KYC requirements “to open a developing country bank or exchange account.”
The most expensive jobs involve the KYC actor putting his face and name on a scam project. CertiK pointed out that most of the actors are apparently exploited, since they are in developing countries “with an above-average concentration in Southeast Asia” and are paid around $20-30 per role.
For his part, more complex verification requirements or processes could fetch an even higher asking price, especially if the KYC actors are residents of countries considered low risk for money laundering.
Some roles paid up to $500 a week if an actor was to play the role of CEO of a rogue project.but the market for KYC players was “marginal” compared to the market for already KYC-enabled crypto exchange and bank accounts, according to CertiK.
Conversions from crypto to fiat – or vice versa – were also cited as a significant percentage of transactions seen on these markets; CertiK estimated that more than 500,000 members in market sizes ranging from 4,000 to 300,000 were buyers and sellers in these black markets.
CertiK warned that More than 40 websites claiming to research cryptocurrency projects and offer “KYC badges” are “useless” as the services are “too shallow to detect fraud or simply too amateurish to detect insider threats.”
He added that the teams behind these websites “lack the necessary “research methodology, training and experience”, which means that scammers take advantage of these badges to deceive the community and investors.
Having said that, the sector has been hard at work and is gaining ground in its fight against cryptocurrency scammers. A tool launched in October by traditional finance giant Mastercard combines artificial intelligence and blockchain data to help find and prevent fraud.
Contrary to popular belief, the open nature of blockchain transactions means that it is more difficult for fraudsters to hide the movement of funds. Another recent example has been the work of French authorities who used on-chain analytics to find and charge five people who stole non-fungible tokens (NFTs) through a phishing scam.
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