A new global study has uncovered a critical transformation in how cryptocurrency platforms are defending against fraud, driven by the rapid rise of artificial intelligence and the limitations of traditional login security.
AI-Powered Threats Reshape the Security Landscape
The research, conducted by identity verification solutions developer Regula and released in January 2026, indicates that crypto firms are fundamentally rethinking their approach. The catalyst for this change is the growing sophistication of AI-powered attacks, which are exposing the weaknesses of conventional multi-factor authentication (MFA).
The data reveals a stark picture of current security postures. According to the study, a mere 28% of crypto industry respondents cite MFA as a primary identity or fraud control. Other common measures include IP and geolocation analysis, used by 25% of firms, and dark web monitoring at 23.6%. While these tools are widely deployed, the study notes they primarily operate at the session level, validating access signals rather than confirming the actual identity of the user.
Biometric and Document Fraud Emerge as Top Threats
This security gap is directly reflected in the types of fraud now plaguing the sector. When asked to identify the most frequent forms of identity verification fraud, respondents pointed to two equally prevalent threats: biometric fraud and document fraud, each cited by 35% of those surveyed.
Biometric fraud involves the use of fake or stolen biometric data, such as synthetic fingerprints or deepfake facial recognition. Document fraud relies on counterfeit or altered identification documents. The findings signal a clear shift in criminal tactics, moving away from simple account takeover attempts and toward directly compromising the core identity verification process itself.
The acceleration of AI-enabled fraud is making login-centric defenses increasingly obsolete. Attackers now use synthetic identities, manipulated media, and AI-assisted techniques to mimic legitimate user behavior and device patterns. This allows them to blend into normal traffic without ever proving their true identity, creating a dangerous chasm between access security and genuine identity assurance.
The Crypto Industry's New Verification Priorities
In response, crypto platforms are pivoting from one-time login security to continuous identity certainty. The study highlights a clear investment trend for 2026, focusing on deeper identity-layer solutions rather than additional perimeter controls.
The top three priorities for crypto firms are:
- Biometric Verification and Authentication (26.39%): Chosen for its ability to provide stronger proof that a real, physical person is present and tied to an account during critical actions.
- Human Expert Review (22.22%): Valued for the careful, nuanced handling of high-risk or high-impact cases that automated systems might miss.
- Orchestration of Multiple IDV Tools (18.06%): Sought to create a centralized system for designing, managing, and adapting complex verification workflows across different scenarios.
Biometric verification is emerging as the foundational trust signal for the future. Unlike passwords or device tokens, biometrics confirm the presence of a specific individual, not just a proxy. They also provide a more stable identity reference throughout the user lifecycle, reducing dependence on credentials that can be easily stolen, shared, or spoofed by advanced AI.
This comprehensive shift underscores a broader industry recognition: in the face of AI-driven threats, verifying identity must become a persistent, integrated process, not just a single checkpoint at the login screen.
