Crypto sector urged to adopt cross-industry data sharing to combat fraud and money laundering

Data sharing is becoming a central theme in the crypto compliance conversation as the sector grapples with rising fraud and money laundering threats. In 2024, cryptocurrency scams reportedly amounted to $9.9 billion, with 2025 expected to see even higher losses [1]. The nature of these crimes is evolving, with traditional finance (TradFi) fraud increasingly finding new avenues in the crypto space, including Ponzi schemes, pump-and-dump strategies, and address poisoning. These threats are not only damaging to investors but also eroding trust in digital assets.

The abuse of the crypto sector for laundering the proceeds of traditional fraud has led to regulatory scrutiny intensifying. For example, nearly 90% of crypto registration applications in the UK have failed due to insufficient AML and fraud controls [1]. This highlights a broader challenge: even with individual initiatives such as scam flagging tools and disruption operations, isolated actions are proving insufficient in addressing the scale of the problem. The industry is now being urged to adopt a bolder, more collaborative strategy focused on cross-sector data sharing [1].

In the TradFi sector, cross-industry data sharing is already a widely accepted tool to combat fraud. Mandatory data-sharing agreements between financial services and telcos in Singapore, and voluntary schemes in Australia and the UK, demonstrate how public-private collaboration can strengthen fraud defenses. The crypto sector, however, remains a missing piece of this global puzzle. To effectively tackle fraud, the digital asset community must integrate itself into these existing data-sharing frameworks [1].

Three key actions are proposed to achieve this. First, the on-ramping and off-ramping of fiat and crypto are critical points for intervention. Without data sharing at these touchpoints, the full picture of fraudulent activity remains obscured. Second, the use of crypto in laundering fraud proceeds creates a unique AML challenge, which requires access to upstream data to identify and block bad actors. Third, the digital asset industry, which is still developing its compliance infrastructure, could benefit from the experience and data of more established fraud prevention experts in other sectors [1].

The UK has emerged as a potential leader in this space. From a legal standpoint, the Information Commissioner’s Office recently emphasized that data protection should not hinder fraud prevention efforts. Additionally, the Data (Use and Access) Act 2025 has enshrined crime prevention as a recognized legitimate interest, providing a legal basis for data sharing [1]. Regulatory signals are also aligning in favor of stronger compliance measures, with the UK Chancellor indicating that digital assets will face the same consumer protection rules as traditional finance. The Financial Conduct Authority has also highlighted data sharing as a crucial tool for countering fraud laundering [1].

The UK’s existing financial crime data-sharing infrastructure, including the Joint Money Laundering Intelligence Taskforce, provides a model that can be expanded to include the digital asset sector. With regulatory and political support, the integration of crypto data into these frameworks could accelerate, enhancing the effectiveness of global fraud prevention efforts.

While the case for cross-industry data sharing is compelling, the challenge lies in implementation. The crypto industry must move beyond isolated efforts and embrace a collaborative model to address the evolving threat landscape. In doing so, it may not only strengthen its own defenses but also contribute to a more secure global financial system [1].

Source: [1] Data sharing is the next crypto compliance frontier (https://coinmarketcap.com/community/articles/6894c091ee5c4d37240e3c5f/)