IDV Trends in Crypto 2025: A Global Overview

Deepfakes—synthetic media created with AI tools to imitate real people and contexts—are officially here to stay. Our study shows a notable rise in deepfake usage in identity fraud, with a 20% increase in video and a 12% increase in audio deepfakes over 2022*.

This trend is clear in Crypto as well. For example, 53% of companies reported encountering video deepfakes in their systems, up from 45% in 2022. That is an increase of almost 18%. 

Fraudsters use deepfakes to bypass IDV checks during onboarding or authentication, which are fully digital for almost all Crypto providers. With fake IDs and live videos more accessible and affordable than ever, deepfakes are a go-to tool for presentation attacks, account takeovers, and sophisticated phishing campaigns.

Importantly, fraudsters exploit deepfakes in cryptocurrency scams, which can cast doubt on Crypto’s reputation as a fair, compliant industry.

A high-profile example involved Singapore’s Prime Minister, Lee Hsien Loong. In a video manipulated with deepfake technology, based on a genuine interview with Chinese news network CGTN, the Prime Minister appeared to promote a cryptocurrency scheme, falsely guaranteeing returns on investment.

The challenge is that many people struggle to distinguish altered videos or images from real ones, making it easy to sway public opinion. This turns deepfakes into a powerful weapon for deception and unfair competition.

Crypto organizations need to take proactive measures to improve their ability to identify and counter deepfake threats. A system of constant review and improvement also needs to be put in place, as these threats are rapidly evolving and ever-changing.

While deepfakes have become the main focus, Crypto companies still face widespread identity fraud through more conventional methods. This Crypto market trend is likely to continue into 2025.

In particular, 45% of Crypto businesses have encountered fake or altered physical identity documents commonly used in customer verification.

Another persistent issue is synthetic identity fraud, where real data, such as Social Security Numbers and addresses, is combined with AI-generated images or names. Over half of Crypto companies (53%) reported dealing with this in 2024.

Presenting a passport, driver’s license, or ID card remains essential for account verification at many Crypto companies; therefore, these challenges are expected to carry over into 2025.

As concepts like self-sovereign identity (SSI) gain traction, the KYC landscape may evolve, including in Crypto. With frameworks where users can selectively control and share their personal data, physical IDs could gradually be replaced by digital IDs stored in secure personal wallets.

While there is a new focus on deepfakes due to the rapid growth of AI technologies, Crypto businesses can’t afford to neglect traditional IDV threats, as they are also growing.

Despite most Crypto businesses experiencing a growing number of identity fraud incidents, the industry largely maintains a calm stance. Many companies view synthetic identity fraud (49%), video deepfakes (43%), audio deepfake fraud (35%), and physical ID counterfeiting (53%) as moderate threats. Only a quarter of respondents consider deepfakes a serious issue.

In comparison, 42% of IT companies view video deepfakes as a significant threat, as they are well aware of how damaging this technology can be.

It’s good that Crypto companies are stoic in the face of this major threat. However, stoicism as a Crypto market trend on its own isn’t enough: significant actions need to be taken in order for Crypto companies to better protect their business, customers, and staff.

On average, industry players lost about $440 million over the last year from deepfake attacks. This number is surpassed only by Financial Services, Law Enforcement, and Telecommunication in Regula’s study covering seven sectors. For 37% of Crypto firms, losses ranged from $500,000 to $1,000,000.

The top concerns were legal expenses (reported by 35% of Crypto representatives) and potential penalties and fines (33%).

These concerns are well-founded, as the Crypto market is under constant regulatory scrutiny, with evolving requirements.

For example, the EU’s Markets in Crypto-Assets Regulation (MiCA) is currently being implemented to harmonize crypto-asset rules across the EU, covering areas not yet addressed by existing financial legislation. MiCA mandates transparent, disclosed, and authorized crypto-asset transactions, requiring identification of both sender and receiver—possibly prompting Crypto companies targeting this region to revise their IDV procedures.

Interestingly, the industry itself supports regulation in light of the growing deepfake threat. The presence of strict KYC for Crypto likely contributes to this perception. A majority of respondents—39%—advocate for a regulatory body dedicated to monitoring and combating deepfakes. Additionally, 31% of companies support stricter IDV standards and increased penalties for creating and distributing harmful deepfakes. This sets another Crypto trend.

The regulatory framework around Crypto is constantly evolving, and there are more and more examples of harsher and larger penalties. This is expected to continue in 2025 and beyond. Therefore, Crypto companies need to be ahead of the game and strive to a higher level than is required by current regulations.

In IDV procedures, 90% of companies on the market view online document verification and live video interviews as the most effective methods for confirming user identities online. When asked to choose among three IDV options, 38% of respondents favored live video interviews, 34% selected online document verification, and 26% preferred biometric verification.

These methods are widely adopted by many businesses.

Additional anti-fraud measures commonly used include multi-factor authentication (MFA) with facial recognition (78%), fingerprint and selfie verification (72%), and MFA alone (58%).

As IDV processes become increasingly layered and involve multiple steps, keeping the user experience smooth and convenient remains crucial. Striking this balance is a lasting Crypto market trend in identity verification.

Crypto organizations need to move to a multi-layer liveness-centric MFA approach in IDV. This includes paying attention to the device used to access a service, as well as its location, interaction history, and any other factors that can verify the authenticity of the identity.

Fortunately, more companies are embracing this approach. With cryptocurrency now viewed more as an investment than a means of transferring untraceable funds, Crypto businesses are beginning to operate more like traditional banks. As a result, the security of identity verification for Crypto is now comparable to that of Banking.

New IDV concepts are emerging, from using portable Digital IDs to confirm Crypto transactions to verifying identities with zero-knowledge proofs, where personal data remains private. 

While these ideas sound futuristic and privacy-focused, today’s IDV frameworks aren’t yet equipped to adopt such tools—neither on the company nor the user side. As states work towards standardized approaches, many users, especially those over 25, still find non-physical IDs somewhat unfamiliar and, therefore, inconvenient. Technological disparity and regional differences in views on identity and privacy are also delaying this transition. 

Still, the shift is on the horizon, and the Crypto industry—often at the forefront of tech breakthroughs—may be among the early adopters of these advancements.

*After aligning the 2024 survey data with the 2022 cohort for a direct comparison.