Sift’s Top Takeaways from Bitcoin 2022
Bitcoin 2022 in Miami, Florida was one of the largest bitcoin events in history, bringing together some of the most influential names in the industry. The four-day conference gathered over 30,000 attendees, including bitcoin enthusiasts, venture capitalists, merchants, developers, financial institutions, and regulators. Hosted by Bitcoin Magazine and sponsored by Cash App, the conference explored the technological advancements, financial innovation, and cultural shift of bitcoin.
Our team attended the conference with a unique perspective, through the lens of fraud prevention. As the payments landscape continues to change and evolve, we’re closely monitoring how fraudsters are adapting their own strategies to find vulnerabilities to exploit for their own ill-willed gain. Below, we share our insights from Bitcoin 2022 and why Digital Trust & Safety should be top of mind for blockchain businesses, and all companies considering accepting crypto payments.
Innovation moves bitcoin mainstream
More merchants are beginning to accept cryptocurrency payments, including bitcoin, and this adoption is only accelerating. During Bitcoin 2022, Jack Mallers debuted the Strike & Cash App partnership, allowing consumers to pay at major retailers (e.g., Walgreens, Publix, Walmart, and Chick-Fil-A) using BTC directly from Tor (aka “The Onion Router”), or otherwise completely outside of traditional card networks. WorldPay also now supports crypto payments in 42 countries.
Many businesses are taking advantage of weaknesses in the financial sector to disrupt the industry with decentralized technologies. And despite the scrutiny and regulatory hurdles, more businesses and consumers are seeing the benefits. “Crypto provided immediate financial relief to Ukraine, much more efficiently and safely than via traditional financial institutions,” noted Brittany Allen, Trust and Safety Architect at Sift.
Regulations bring change and opportunity
During Bitcoin 2022, Shark Tank’s Kevin O’Leary argued that stable coins are the fastest-growing asset class outside of bitcoin. And to see crypto assets appreciate, we need policy. Regulations in the crypto industry have many businesses bracing for change, but from a fraud-prevention perspective, these regulatory measures will help secure exchanges and create opportunities for market expansion in the long run. Although many crypto regulations remain in flux, it’s clear the federal government will continue cracking down on cybercriminals treating crypto as a safe haven to commit fraud.
The recent Securities and Exchange Commission announcement of crypto regulations and the Department of Justice’s massive crypto seizure could be a sign of what’s to come. With crypto already falling under increased regulation and taxation from agencies like the IRS and SEC, we’re likely to see more reporting mandates. A March 2022 executive order calls for continued research and reporting on the creation of a central bank digital currency (CBDC) backed by the Federal Reserve. Although the details of these regulations are yet to be finalized, businesses must be prepared to adapt and start prioritizing consumer protection now.
Fraud prevention can’t be an afterthought
A recent Sift report showed attempted payment fraud attacks increased 200% in digital wallets and 140% in crypto exchanges across the global Sift network in 2021. As these threats continue to mount, regulations won’t be enough to protect businesses and consumers, nor should they prevent companies from prioritizing security. On the consumer side, BTC buyers need to protect themselves by ensuring they’re using verified exchanges and avoiding public wifi networks that could be less secure. But much of the responsibility falls on businesses to prove their trustworthiness and keep their customers safe.
Crypto companies should be setting up onboarding systems to verify personally identifiable information (PII) and monitor account behavior with advanced machine learning. Utilizing anti-money laundering (AML) regulations and know-your-customer (KYC) solutions are key to maintaining safe and reliable platforms. And on the front end, offering multi-factor authentication (MFA) can help confirm users’ authenticity.
Take our Digital Trust & Safety Assessment to get more insights and custom recommendations for your business from our trust and safety experts.
