Blockchain security company CertiK has discovered that cryptocurrency scammers have been able to access a cheap and simple black market of people eager to put their name and face on fake projects — all for the modest sum of $8.
Before an “insider hack or exit fraud,” these people, whom CertiK refers to as “Professional KYC actors,” might, in some situations, voluntarily take on the role of the verified face of a cryptocurrency project to win over the community’s trust.
These KYC actors can also be used to open bank or exchange accounts for bad guys using their identities.
The KYC actor puts their name and face to a phoney project in more expensive jobs. According to CertiK, the majority of performers appear to be being taken advantage of because they are located in underdeveloped nations “with an above-average concentration in South-East Asia” and receive salaries of $20 to $30 for each job.
Higher asking prices could result from more demanding requirements or verification procedures, especially if the KYC actors are citizens of nations with low money laundering risks.
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.
CertiK says that the market for KYC actor roles was “marginal” in comparison to the market for already KYCed bank and cryptocurrency exchange accounts. However, some roles paid up to $500 per week if an actor were to play the role of CEO for a fraudulent project.
Over 40 websites, according to CertiK, that claim to assess cryptocurrency projects and provide “KYC badges” are “worthless,” since their services are “too superficial to detect fraud or just too amateur to detect insider threats,” the company warned.
As a result, scammers can use these badges to deceive the public and investors because the teams behind these websites lack the necessary “investigation methodology, training, and experience.”
Despite this, the industry has been putting in a lot of effort and has seen some success in its fight against crypto scammers. The card-issuing giant Mastercard introduced a solution in October that combines blockchain data with artificial intelligence to identify and prevent fraud.
Contrary to popular assumption, it is more difficult for fraudsters to mask the transfer of money due to the open nature of blockchain transactions.