Crypto fraud surges after Donald Trump’s re-election
Crypto platforms have been warned the industry is at a “critical juncture” after a Sumsub report showed a spike in fraud cases.
The verification platform’s State of the Crypto Industry 2025 said fraud cases were up 48 per cent, with document forgery making up 31 per cent of detected cases in the last year.
Following President Donald Trump’s re-election and pro-crypto stance, Sumsub recorded a 20 per cent rise in platform traffic.
Trump’s return to the White House had Bitcoin rallying to record heights, touching $100,000 at the end of 2024.
However, cyber-security experts said market expansion must come with added vigilance.
Global head of threat analysis at Darktrace, Toby Lewis, told CityAM: “The surge in crypto fraud isn’t surprising – we’re seeing fraudsters evolve their tactics as fast as the market itself.
“In an industry deliberately designed to preserve anonymity, tracking and investigating fraud becomes exponentially more complex.”
Lewis said: “Security can no longer be an afterthought.
“It must be woven into the very fabric of how these platforms operate.”
Crypto industry at a crossroads
BSI group’s Conor Hogan told CityAM: “Fraud trends in the sector highlight the challenges of balancing innovation with security, particularly as crypto exchanges onboard new users at scale.
“Document forgery, as an example, might suggest potential vulnerability in identity verification processes.”
After document forgery, the most common types of fraud included phishing at 20 per cent, money laundering at 15 per cent, and account takeover at 14 per cent.
“The industry is at a crossroads,” Hogan cautioned.
He added: “Regulatory uncertainty remains a major challenge…Compliance should not be seen as a regulatory burden but as an enabler of trust and long-term sustainability”.
“Those who proactively align with evolving global standards will be better positioned for institutional adoption and mainstream legitimacy.”
Hogan said he expects the future of crypto to be shaped by three factors: regulatory clarity, stronger security measures and institutional confidence.
The report showed AI-backed automation and document-free verification had boosted crypto platform users’ onboarding success rates to 93 per cent, with verification time down 46 per cent.
The study used responses from over 300 companies across crypto, banking, payments and e-commerce sectors whilst comparing internal data over the last two years.
Chief growth officer at Sumsub, Ilya Brovin, said: “Once deemed the ‘Wild West’ crypto is now at an inflection point.
“Companies must adopt robust onboarding technology, strengthen security to protect users from fraud, and ensure compliance to avoid penalties and reputational damage.”