As the industry works to develop fraud detection, Certik, a pioneering company in Blockchain Security, uncovered an underground network of KYC actors for hire on November 17th. Some rogue developers used them to scam Web3 communities.
The decentralization of the internet and the potential of blockchain technology has sparked a desire among many people in Web3 communities – unfortunately, this has left them open to misconduct from fraudulent individuals as well as malicious intentions.
The blockchain security firm CertiK previously reported that there had been 377 Web3 scams and exploit assaults so far in 2022, resulting in losses of more than $2.3 billion.
According to CertiK’s most recent analysis, criminals have developed a variety of tactics to deceive communities and investors, but a Know Your Customer (KYC) actor is probably one of the most intriguing.
The blockchain security firm said:
In our context, a KYC actor is an individual specifically hired to KYC on behalf of rogue project owners looking to gain trust in the crypto community prior to an insider hack or an exit scam.
Additionally, when the KYC actor was discovered and identified by the company’s investigators, the subject agreed to provide a detailed explanation of how it all works.
CertiK Reveals The Dark Side Of KYC
The actor claims that hiring a person to conduct a KYC for a fraudulent business is shockingly affordable and simple like if the job requirements are simple, a KYC actor’s fee might be as cheap as $8.
The actor had been pretending to be a KYC for more than three years. He also provides “proof of transactions for his KYC gigs,” along with links to the specialty marketplaces where he obtains his illicit clients.
However, through this investigation, researchers were able to monitor the activities of over 20 over-the-counter (OTC) underground marketplaces. The majority of OTC was found on Telegram and Discord, as well as other simple phone-based applications and job postings on gig websites.
Moreover, CertiK has calculated that “the global prevalence of these OTC marketplaces is significant,” with a high concentration in Southeast Asia and group sizes ranging from 4,000 to 300,000 members. In addition, there are an incredible number of over half a million (500,000) people who are either buying or selling these illicit currency exchanges.
Furthermore, the firm also claimed that more than 40 sites offer “KYC badges” to assess the potential risks of a project before investing. The latest statistics show that over 2,000 such credentials have been issued through these sites so far. But CertiK considers these services worthless.
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