The global identity intelligence firm AU10TIX has released its report about the trends of identity fraud witnessed in the third quarter of this year. This report disclosed a shift in global identity fraud from the cryptocurrency sector to the digital payments space.

The crypto sector, historically a hotbed for fraudulent practices, experienced a decrease of 51% in fraud. Conversely, the digital payments space saw a surge of 56% in scams. This shift, according to AU10TIX’s report emailed to Finance Magnates, is attributed to the impact of the EU’s Market in Crypto-Assets (MiCA) regulations.

Ofer Friedman, the Chief Business Development Officer at AU10TIX, mentioned: "Organized crime groups are exploiting gaps in detection technology to orchestrate financial fraud on a massive level simultaneously across multiple businesses and geographies. Actual fraud rates are multiple times higher than reported."

The Impact of the MiCA Regulations

The introduction of the MiCA laws marked a turning point in the crypto landscape, signaling the end of unregulated activities and a step towards safeguarding investors. The impact of this regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term has led many entities globally to adopt stricter Know Your Customer practices, making it challenging for crime organizations to operate in the sector.

Consequently, fraudsters are diverting their efforts toward the less regulated payments sector. The report revealed alarming statistics, indicating that the payments sector has become the prime target for organized fraud groups, accounting for 51% of all financial fraud attacks. This is a significant upsurge from 32% in the previous quarter.

In contrast, the crypto industry witnessed a decline, accounting for only 23% of attacks, down from 47%.

North America Tops the List

Notably, North America emerged as the most targeted region for the attacks in the payment sector. This is attributed to fraudsters capitalizing on economic recovery and increased spending. Meanwhile, the Asia-Pacific region faced challenges due to the complexity of digital transactions, presenting loopholes for fraud.

AU10TIX's study is corroborated by a recent report published by Finance Magnates, indicating that understanding and implementing compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term standards is important as cross-border transactions surge.

Currently, third-party service providers grapple with safeguarding the interests of their stakeholders. The lapses in regulatory frameworks exacerbate these challenges, demanding policymakers to take more assertive action in holding providers responsible for potential risks.

There has been a rise in credit-related fraud across cross-border payment platforms due to limited evaluation channels for credit status. Additionally, unclear guidelines hinder stakeholders' protection, demanding institutional players establish working mechanisms.