Data Sharing Is The Next Crypto Compliance Frontier

Opinion by: Mike Haley, CEO of Cifas

While the crypto industry is revolutionizing the world of finance, there’s an underlying reality bubbling beneath the surface. Hitting record levels, cryptocurrency scams reportedly accounted for $9.9 billion in 2024 — with 2025’s forecast making for even bleaker reading.

Whether in the form of “old wine in new bottles” frauds — such as Ponzi and pump-and-dump schemes or new crypto-specific fraud typologies like address poisoning — the global fraud epidemic is hitting the industry hard and undermining consumer confidence.

Criminals are increasingly abusing the sector to launder the fraud proceeds generated in the traditional finance (TradFi) sector. This creates compliance challenges for firms keeping pace with evolving Anti-Money Laundering (AML) rules. After all, nearly 90% of crypto registration applications in the UK fail because of weak AML and fraud controls.

Crypto sector abuse

This abuse of the crypto sector is not going unnoticed by an industry working hard to clean up its image in the eyes of global regulators, many of whom are starting to look to regulate the sector beyond the AML perimeter. Efforts by individual firms — like industry scam flagging tools and disruption operations — laudable though they may be, will have limited effect in isolation.

The industry needs a much bolder approach to anti-financial crime data sharing.

Cross-sector public-private data sharing to tackle fraud is fast becoming the norm in the TradFi sector. Whether via mandatory anti-scam data sharing between financial services and telcos in Singapore or industry-led voluntary schemes in Australia and the UK, data sharing is accepted globally as one of the key defenses against global fraud. 

Related: Blockchain compliance tools can slash TradFi costs: Chainlink co-founder

We can only put a dent in this global crime wave by joining the dots along the fraud value chain. As fraud adapts to the new financial landscape internationally, what is missing in this chain is the digital assets community. Bringing the community into existing data-sharing efforts will not only help to build a strong ecosystem but will also benefit the industry itself. 

Theory to action

There are three things the industry should do.

First, the current limited use of crypto as a mainstream payment medium means even the most committed crypto criminal cannot exist in isolation. The on-ramping and off-ramping between crypto and fiat currencies are key…