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2024 Marked as 'A Year of Onboarding' for Crypto Platforms

A recent report from Sumsub, a global leader in verification solutions, has shed light on the current state and future prospects of the cryptocurrency industry. The document titled State of the Crypto Industry 2025 reveals that 2024 was predominantly recognized as 'A Year of Onboarding' for various crypto exchanges, significantly due to increased user activity in response to major market events.

Highlights of the Report

The report indicates a notable 20% surge in traffic to crypto platforms during crucial periods, such as the reelection of former President Donald Trump and the increases in Bitcoin’s value in November 2024. However, alongside this uptick in engagement, the report also warns of an alarming 48% spike in fraudulent activities within the sector.

Rise in Fraud

A substantial portion of fraud has emerged from document forgery, accounting for 31% of all reported fraudulent cases, which greatly impacts the integrity of the crypto space. Sumsub's analysis pointed out that 60% of crypto-related enterprises now anticipate stricter regulations, yet a mere 29% indicate full compliance with the Travel Rule, positioning many companies at risk of sanctions as the regulatory environment tightens.

Challenges Ahead for Crypto Companies

The report identifies three main challenges that crypto service providers must address moving into 2025:
1. Security Threats: With a fraud rate of 2.2% across verification attempts, companies need advanced tools such as AI-driven detection systems and continuous monitoring to bolster security measures.
2. Technical Capabilities: Innovations like biometric checks and AI-backed automation have proven effective, raising onboarding success rates to an impressive 93.39% and reducing verification time by 46%. The adaptation of document-free verification approaches has been seen as a game-changer, particularly in countries like Brazil and the UK.
3. Navigating Regulations: The report emphasizes the importance of compliance with the Travel Rule, as outlined in FATF Recommendation 16. Crypto ventures need to clarify the complexities surrounding this requirement to avoid legal repercussions while facilitating smooth operations.

Innovations Driving Change

Recent technological advancements have helped to streamline the onboarding process for users. The implementation of document-free verification has shown significant improvements in onboarding speeds, cutting down verification times by an average of 3.6%. This approach is particularly embraced in Africa, where adoption rates reach 27% among crypto companies surveyed.

Furthermore, many companies are unhappy with user experience, noting that slow verification processes hinder progress for approximately 36% of respondents, while issues of incorrect verification outcomes affect 48%. In response to these challenges, crypto platforms must evolve their strategies to improve the onboarding processes to meet rising customer expectations.

The Future of Crypto in 2025 and Beyond

As companies gear up for 2025, the interplay between innovative technologies and evolving regulations is vital for survival and growth within the crypto sphere. As noted by Ilya Brovin, Chief Growth Officer at Sumsub, the shifting regulatory landscape mandates that companies must adopt robust onboarding technologies and strengthen their defenses against fraud while ensuring compliance guidelines are met to avoid damaging penalties.

To delve deeper into findings from the State of the Crypto Industry 2025 report, visit Sumsub's official website. This document not only examines the patterns of fraud and regulations in detail but also provides critical insights that stakeholders across the crypto industry can use to navigate the complexities ahead.