Fraudulent activity has shifted away from the cryptocurrency space, with a sharp drop of 51%。This change is mainly due to the implementation of the Crypto Asset Market (MiCA) regulations。Due to tighter regulation, fraudsters are finding it increasingly challenging to do business in the cryptocurrency market, so they have turned their focus to exploiting vulnerabilities in the payments space.。

AU10TIX, a global identity intelligence firm based in Israel, recently released a report on the state of fraudulent identities worldwide in the third quarter of 2023.。The report delves into the impact of the Mobile Payment Agreement, highlighting the need to strengthen investor protection.。

In addition, the report reveals how the regulatory crackdown in the crypto space has shifted fraud to the payments space.。The report details a 56% surge in fraud in payments, driven by factors such as increased digital transactions in the Asia-Pacific region and the economic recovery in North America.。

Impact of global organized fraud

AU10TIX Chief Business Development Officer Ofer Friedman said: "Organised crime syndicates are exploiting vulnerabilities in detection technology to conduct large-scale financial fraud across multiple businesses and geographies simultaneously.。The actual fraud rate is several times higher than reported。"

At the same time, in the Asia-Pacific region, the rise of digital transactions, coupled with the complexity of economic diversification and cross-border transactions, has created difficulties in identity verification.。In payments, North America faces huge challenges, a situation that presents potential loopholes for fraudsters。

There have been more attacks in North America, which have been linked to fraudsters taking advantage of the region's economic recovery and consumption growth。

Risks remain under regulation

While cryptocurrency investors look forward to MiCA's safety net, a recent statement from the European Securities and Markets Authority (ESMA) reveals a worrying reality。The ESMA reportedly urged preparation for the MiCA's implementation and cautioned retail investors that the regulations would not protect their investments until December 2024.。

MiCA aims to regulate crypto asset activity across the EU to strengthen consumer protection and market stability。The European Securities and Monetary Authority (ESMA) has set expectations for national authorities and crypto asset service providers to harmonize regulatory practices.。

Despite MiCA's ambition, the European Securities and Monetary Authority cautions that the risks inherent in crypto assets remain even after the implementation of MiCA。The regulator stressed that MiCA would not provide full protection until the regulation was fully implemented.。

MiCA was formally approved in May 2023 and is scheduled to be promulgated in December 2024, with the transition period likely to be extended until July 2026.。It depends on the decision of the member states。

In May of this year, the Council of the European Union adopted the MiCA, which is an important milestone in the EU's efforts to regulate cryptocurrencies, marking the EU's joint efforts in protecting investors, promoting environmental sustainability and curbing cryptocurrency money laundering.。