AI Fraud Is Breaking the Internet’s Trust Economy. Can Compliance Tech Keep Up?

The lines between crypto and traditional finance are rapidly dissolving. Big players like Deutsche Bank plan to offer crypto custody by 2026. Circle and Ripple are seeking national banking charters. Meanwhile, lawmakers across the U.S. and EU are racing to regulate the frontier through proposals like the GENIUS Act and MiCA.

This moment signals more than just institutional adoption. It marks a fundamental rewriting of what trust means in the financial system. But while the infrastructure of legitimacy is being built, the infrastructure of fraud is already here.

And it’s evolving faster

AI-Powered Fraud Is Now a Feature, Not a Fluke 

As crypto matures, so do the scams. Deepfakes and AI-generated identity documents are no longer rare anomalies,. they’re showing up in routine onboarding flows across crypto, e-commerce, and healthtech platforms.

“We’re not just verifying documents anymore,” says Ilya Brovin, Chief Growth Officer at Sumsub. “We’re verifying reality itself.”

According to identity verification company Sumsub, deepfake-related fraud attempts in the U.S. rose 1,100% year over year in Q1 2025. Synthetic identity document fraud rose 300% in the same period. These figures aren’t just abstract, they represent fake users bypassing verification, stealing funds, gaming platforms, and undermining user safety and institutional credibility.

For compliance teams already stretched thin, the threat is existential. And in crypto, where speed and decentralization are the norm, traditional KYC methods are buckling under the weight of next-gen fraud.

The Travel Rule and the New Compliance Stack

Sumsub believes the next chapter of fraud prevention lies in building smarter infrastructure—tools that work with the speed and complexity of Web3, not against it.

One example is its Travel Rule SDK, designed to help crypto businesses stay compliant with regulations requiring the exchange of sender and receiver information between virtual asset service providers (VASPs). With connections across more than 1,700 platforms, the SDK ensures secure and standardized data exchange between wallets. But it also helps reduce onboarding friction—Sumsub says it can cut drop-off rates by up to 35%.

“If security slows you down, users bounce,” Brovin says. “But if you get it right, it becomes a competitive edge.”

From Risk Management to Growth Enabler

What used to be considered back-office work, such as compliance, fraud prevention, transaction monitoring, is now a core part of user experience and platform performance.

Sumsub’s platform now includes real-time fraud detection across devices, dynamic onboarding logic, and “Summy,” an AI assistant that helps compliance teams flag patterns and prep for audits. Just as important, its Case Management system gives teams a single workspace to investigate suspicious activity, collaborate across departments, and document compliance actions in real time. Instead of juggling spreadsheets or siloed tools, teams can track investigations end-to-end, escalate cases quickly, and generate audit-ready reports. The result: faster resolution, clearer accountability, and a compliance function that scales with business growth.

Further its recent integrations with Solana and Linea signal a broader ambition: to become the identity layer for the Web3 stack. Sumsub’s recent integrations with Linea and Solana mark a step forward in reusable, privacy-preserving digital identity for Web3. Sumsub issues on-chain identity attestations—created after liveness checks and AML wallet screening and lets pre-verified users reuse their Sumsub ID across platforms, enabling fast, compliant onboarding without exposing personal data on-chain. 

That means enabling reusable digital identities—verifiable credentials that allow users to control their data across platforms while reducing onboarding time and exposure to fraud. For builders, it’s the key to scaling trust across decentralized environments. For users, it’s a path to data autonomy.

Trust Is Infrastructure Now

There’s a bigger shift happening. Trust is no longer a byproduct of good service. It has to be designed into the system from the start.

That’s especially true in an era of AI-generated humans and decentralized protocols. Platforms can no longer afford to treat compliance as a regulatory checkbox. It’s a trust signal. A safety net. A growth engine. And it’s quickly becoming a requirement for accessing regulated markets and serious capital.

But building that trust raises deeper questions:

• Can fraud detection outpace AI-generated deception?

• Can identity systems be secure and privacy-preserving?

• And can the architecture of trust evolve fast enough to match the pace of disruption?

Building Smarter to Build Safer

At Sumsub, we are constantly investing in innovative solutions that improve the overall security, compliance and infrastructure of the crypto ecosystem. 

Sumsub is betting that the answer lies in three things:

• Full-cycle verification that goes beyond KYC to detect fraud throughout the user journey (especially post-onboarding, where 76% of fraud occurs)

• Reusable digital identity, giving users more control and businesses faster, safer onboarding

• Multi-layered protection, combining device intelligence, behavioral analytics, and real-time monitoring to catch threats before they spread

Together, these tools create a scalable, secure foundation for Web3, where trust is integrated from the start rather than applied afterward.

“We’re building a future where trust isn’t assumed,” Brovin says. “It’s engineered.” 

Whether they succeed could shape not just the future of crypto, but the trust economy of the internet itself.

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