Blockchain Platforms Embrace AI-Driven Fraud Prevention Systems

Blockchain platforms require flexible and adaptable fraud detection systems to mitigate the evolving risks associated with cryptocurrency transactions.

Unlike traditional industries, blockchain environments are characterized by a lack of uniformity, making rigid models for detecting synthetic identities difficult to rely on. As a result, many crypto companies are adopting AI-driven fraud prevention systems that can be tuned as new threats emerge.

The shift towards more adaptable approaches is driven by the need to balance compliance with evolving requirements such as the FATF Travel Rule across multiple regions while protecting user privacy. This creates a problem for fixed detection models, which may not work effectively for different types of platforms, including centralized exchanges, DeFi protocols, and NFT marketplaces.

When evaluating fraud prevention tools, blockchain platforms need systems that can be shaped around their workflows, incorporating adjustable risk scoring, biometric verification, and integrated compliance. Customization, biometric liveness detection, and real-time sanctions screening are key requirements. Additionally, crypto-specific needs such as wallet verification, multi-chain identity support, and fast onboarding flows are increasingly expected.

Two notable providers, Incode and Sumsub, offer customizable solutions for identity verification and risk management. Incode's AI-powered platform brings together biometric liveness detection, AI-driven fraud analysis, and KYC/AML compliance automation into a single system used across onboarding and ongoing interactions. Its proprietary models can be retrained relatively quickly to recognize new fraud patterns.

Sumsub, on the other hand, offers a full-cycle identity verification platform designed to handle onboarding, compliance, and fraud prevention across various digital businesses, including crypto exchanges and virtual asset service providers. While Sumsub provides broad crypto compliance coverage, Incode's in-house systems and faster model updates offer a more adaptable approach for blockchain platforms that require deeply customizable fraud models.