Crypto Firms Shift Gears on Security as AI Fraud Rises

Crypto firms are rethinking their security strategies. They are moving away from traditional methods like multi-factor authentication (MFA). This shift is happening because AI-powered fraud is on the rise. Only 28% of crypto firms now rely on MFA as their primary defense. Instead, they are turning to other measures like IP and geolocation analysis, and dark web monitoring. The problem is that these methods focus on access signals, not the actual identity of the user. This gap is making it easier for fraudsters to exploit biometric data and fake documents. Biometric fraud and document fraud are the most common types of identity verification fraud. Each is reported by 35% of crypto firms. As AI fraud becomes more sophisticated, the limitations of login-based security are becoming more apparent. Synthetic identities and manipulated media can mimic legitimate user behavior. This makes it difficult to distinguish between real users and fraudsters.Crypto firms are realizing that identity verification needs to be a continuous process, not just a one-time check. They are investing in biometric verification, human expert review, and orchestration of multiple identity verification (IDV) tools. Biometric verification is seen as a stronger proof of a real person's presence. Human expert review is being used for high-risk cases. Orchestration helps connect signals across different systems. The goal is to create a unified, trusted narrative of who the user really is. This is seen as the foundation for operating safely in the future. The focus is on deeper, more continuous identity proofing. This includes biometrics, stronger document validation, and better orchestration.