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Crypto Scammers Thrive On ‘Cheap and Easy’ Black Market: CertiK Report.


CertiK, a blockchain security firm, found that crypto scammers have been taking advantage of the cheap and easy black market of individuals willing to put their name and face on fraudulent projects. The firm described these individuals as “Professional KYC actors”.

These individuals voluntarily become the verified face of a crypto project and gain trust in the crypto community just ahead of an insider hack or exit scam. The KYC actors use their IDs to open bank accounts or exchange accounts on behalf of the “bad actors”. CertiK analysts found over 20 underground marketplaces hosted on Telegram, Discord, mobile apps, and gig websites to recruit KYC actors.

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For simple gigs like opening a bank or exchange account in a developing country, the KYC actors are paid $8. If the gig involves putting their face and name on a fraudulent project, they get paid more. Simply put, these individuals are exploited as they are based in developing countries in South-East Asia. They get paid $20 or $30 per role. CertiK established that the persons get even more for complex verification processes or risk of low money laundering is involved.

The individuals can make up to $500 a week for playing the role of CEO for a malicious project. However, CertiK also found that the KYC actor market was marginal compared to the market for already KYCed bank and crypto exchange accounts. It said crypto-to-fiat or fiat-to-crypto conversions made a significant percentage of the transactions seen on these marketplaces. CertiK calculated that more than 500,000 members in marketplace sizes ranging from 4,000 to 300,000 were buyers and sellers on the black markets.

The blockchain security firm warned that over 40 websites claiming to vet crypto projects and offer KYC badges are worthless. It should be noted that the services are too superficial to detect fraud, or too amateur to detect insider threats.

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