Global Crypto Fraud Crisis Surpasses $9.9 Billion in 2024 as AML Compliance Fails 90% of UK Platforms

The global cryptocurrency sector is confronting a severe fraud crisis, with losses from scams reaching an estimated $9.9 billion in 2024. The scale of the problem has prompted calls for urgent cross-industry data sharing to address vulnerabilities and combat illicit activities. These findings underscore the urgent need for the sector to adopt more robust compliance and fraud prevention strategies [1].

A key challenge highlighted in the data is the poor performance of crypto platforms in meeting regulatory standards. In the UK alone, 90% of crypto applications have failed Anti-Money Laundering (AML) checks, signaling a significant compliance shortfall. This high failure rate raises concerns over the ability of firms to detect and prevent financial crime, particularly as criminals increasingly leverage cryptocurrency to launder proceeds from traditional finance fraud [1].

The report also points to the ease with which bad actors exploit the borderless and decentralized nature of crypto assets to move illicit funds. Without effective data sharing mechanisms, firms remain isolated in their compliance efforts, limiting their ability to track and intercept fraudulent activity. Experts argue that a collaborative approach is essential to closing these gaps. By enhancing visibility across the fraud value chain, data sharing can enable more effective identification and blocking of suspicious transactions [1].

The UK has emerged as a key region for advancing this agenda. Recent legal clarifications have emphasized that data protection laws should not be used as an excuse to delay or avoid fraud prevention efforts. This shift provides a legal and regulatory basis for the development of cross-sector data-sharing initiatives, which could significantly strengthen the industry’s defenses against financial crime [1].

Moreover, leveraging the expertise of established fraud prevention specialists is seen as a critical step in addressing the crisis. Integrating their knowledge into the crypto sector can help build more robust defenses and improve the overall compliance posture of digital asset platforms. Industry leaders argue that the adoption of mainstream crypto payment systems must be accompanied by equally strong anti-fraud infrastructure [1].

As the sector moves forward, collaboration will be key. The report highlights three main actions: improving the use of crypto as a legitimate payment medium, strengthening defenses against fraud proceeds laundering, and accelerating partnerships with fraud prevention experts. These measures are seen as necessary to restore consumer trust and ensure the long-term viability of the digital asset market [1].

Source: [1] Exploring Data Sharing Solutions to Combat Crypto Scams Amid $9.9 Billion Fraud Crisis in 2024 (https://en.coinotag.com/exploring-data-sharing-solutions-to-combat-crypto-scams-amid-9-9-billion-fraud-crisis-in-2024/)