Cryptocurrency fraud is declining in Asia-Pacific (APAC), driven by advanced technology adoption and stricter regulatory oversight. According to a new report by Sumsub, crypto fraud rates declined by a remarkable 23% between 2023 and 2024, positioning APAC as a leader in combating crypto fraud.
The report, based on Sumsub’s internal identity verification and user activity data from 2023 and 2024, along with a survey of over 300 companies across the crypto, banking, payments, and e-commerce sectors, reveals that APAC was the only region to record a decline in crypto fraud in 2024, with fraud rates dropping from 2.6% in 2023 to 2% in 2024.
According to the report, these results can largely be attributed to advancements in fraud prevention technologies, with innovations like biometrics checks and artificial intelligence (AI)-backed automation significantly enhancing security and fraud detection.
To leverage these capabilities, APAC crypto firms are increasingly relying on specialized providers. Sumsub’s 2024 industry survey reveals a strong preference for automated third-party solutions (40%) and combined methods (45%) for the industry’s identity verification needs. This comes as manual and in-house verification struggle to meet the crypto industry’s fast-paced demands.
In addition to improving fraud detection, technology is also streamlining processes, making onboarding faster while also reducing drop-off rates. Between 2023 and 2024, APAC recorded the highest improvement in verification speed, decreasing average onboarding times by 52% during the period. Hong Kong ranked 6th among the region’s top 10 markets, achieving an average verification time of 18 seconds.
The rise of document-free verification
The Sumsub report also highlights the rise of document-free (non-doc) identity verification. Non-documentary verification enables verifying customer identities without requesting their identification documents (IDs). Instead, this method requires users to provide key details such as an identification number, which are then cross-checked against government databases.
An example of non-documentary verification is Sumsub’s Non-Doc identity and address verification solutions, which allow companies to verify users in 4.5 seconds on average without requiring them to upload photos or documents. According to the 2024 Sumsub crypto survey, countries that have implemented this technology are seeing an average improvement of 3.6% in verification times.
Though non-doc verification remains a relatively new identity verification method, its adoption in APAC is among the highest in the world. Currently, 25% of crypto companies in the region have integrated this method, compared to 19% in Europe and 18% in North America. The global average stands at 19%.
Increased regulatory scrutiny
The decline in crypto fraud rates also aligns with the proactive regulatory measures implemented by major APAC financial hubs to enhance transparency, security, and stability in sector.
In Hong Kong, the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) establishes clear regulatory guidelines and compliance expectations for virtual assets service providers (VASPs), including customer due diligence, ongoing monitoring, and maintaining certain anti-money laundering (AML) and counter-terrorist financing (CFT) records.
In Singapore, the central bank strengthened in 2024 the Payment Services Act (PSA), introducing more stringent requirements for crypto service providers relating to AML/CFT, user protection and financial stability on service providers.
Hong Kong and Singapore are highlighted by Sumsub as two of the world’s top 10 crypto-friendly jurisdictions, recognized for their robust regulatory frameworks, advanced infrastructure, and commitment to fostering fintech innovation.
In Singapore, innovation is supported by government-backed accelerators and initiatives such as the MAS Fintech Sanbox, which offers grants and controlled testing environments for fintech startups. Education also plays a key role, with leading universities including the National University of Singapore (NUS) and the Singapore Management University (SMU), offering specialized blockchain programs.
Similarly, Hong Kong supports crypto innovation through a highly advanced digital infrastructure and strong cybersecurity measures. Regulatory sandboxes facilitate collaboration between fintech associations and international partners, while government-backed project like Project Ensemble Sandbox explore tokenization within the financial sector, further boosting the adoption of blockchain in the industry.
Asia is a global leader in crypto adoption. In 2024, Central and Southern Asia and Oceania (CSAO) dominated Chainalysis’ Global Crypto Adoption Index, with seven of the top 20 countries located in the region. These countries were India (#1), Indonesia (#3), Vietnam (#5), the Philippines (#8) Pakistan (#9), Thailand (#16) and Cambodia (#17).
Further emphasizing the dominance of Asia in the crypto space, data from Triple-A, a digital currency payment company headquartered in Singapore, show that more than half of the world’s crypto holders are located in Asia, totaling 326.8 million out of 560 million crypto owners worldwide.
Featured image credit: edited from freepik
