Crypto scams and trust: what does it mean for identity teams?

TL;DR: Crypto scams are getting more sophisticated as AI, fraud-as-a-service networks, and cross-border operations raise the bar for exchanges and investigators, according to SumSub. The identity lesson is that trust in digital financial systems now depends on stronger user education, better fraud detection, and tighter collaboration across security and law enforcement.

NHIMG editorial — based on content published by SumSub: an episode on how Coinbase investigates scams, protects privacy, and partners with law enforcement

Questions worth separating out

Q: How should crypto platforms reduce scam losses without slowing legitimate users?

A: Use layered controls that combine identity verification, behavioural signals, and transaction risk scoring at the moment of action.

Q: Why do pig butchering scams remain effective even with stronger security controls?

A: They exploit trust formation, not just technical gaps.

Q: How can teams tell whether fraud education is actually working?

A: Look for operational outcomes, not attendance metrics.

Practitioner guidance

• Map scam detection to identity lifecycle checkpoints Identify where onboarding, authentication, transfer approval, and account recovery create the highest fraud exposure, then place controls and review points around those transitions.
• Add context-aware warnings before high-risk transfers Trigger plain-language prompts when the user is about to move funds to a new wallet, a first-time counterparty, or an unusually high-value destination.
• Tighten investigator handoffs and evidence logging Document who can escalate a case, what telemetry is preserved, and when law-enforcement referrals are made so response actions remain traceable.

What's in the full article

SumSub's full episode covers the operational detail this post intentionally leaves for the source:

• John Kothanek's perspective on how Coinbase investigates scams and protects user privacy in practice
• Discussion of how global agencies and exchanges coordinate when fraud cases cross jurisdictions
• Examples of blockchain analytics and transparency reporting in real fraud investigations
• The role of human investigators in tracing fraud patterns beyond automated detection

👉 Read SumSub's episode on Coinbase fraud investigations and crypto safety →

Crypto scams and trust: what does it mean for identity teams?

Explore further

View Full Forum →  |  NHI Foundation Course →