Following 2019 Q1 reports that cryptocurrency fraud amounted to well over $1 billion, two companies have joined forces with the goal to put an end to this growing problem. Wirex offers cryptocurrency services through its banking platform, while Elliptic serves as an anti-fraud and security company. Together the companies are developing “solutions for rapidly detecting fraud and other criminal activity”. But, can they really combat this significant issue?
Stories of cryptocurrency fraud, theft, and scams have been in the news more consistently than ever before. The increasing number of fraudulent activities in this sector comes as a surprise to many given that cryptocurrency is no longer as new and misunderstood as it once was. Yet, Binance is one example where cryptocurrency fraud recently amounted to over $40 million in losses and was undetectable until after the theft of the funds was complete. Binance also suffered severe delays involving their online platform, leaving them offline for numerous days.
Several other cryptocurrency companies have been hit with similar acts of fraud, and each of them has one important factor in common. The theft that occurred on the cryptocurrency platforms was completed prior to any knowledge of the wrongdoing. This has lead many security companies to wonder if there is a solution that would allow cryptocurrency companies to spot acts of fraud before they occur.
Wirex and Elliptic made statements regarding their take on these solutions and what they have to offer the industry, “We have entered a new age in which conventional regulated financial frameworks and the new token economy must coexist. By uniting the existing and future financial ecosystem, Wirex occupies a unique position in the industry. We believe that it is our duty to deliver innovation and choice to our customers whilst ensuring the security of their money and data.”
Co-Founder and CEO of Elliptic added, “Our new working arrangement with Wirex will play a significant role in helping cryptocurrency become more trusted and commonplace.”.
However, Wirex and Elliptic are already quite familiar with each other. For the past three years, these two companies have been working together on and off for a variety of projects. Yet, given the glaring problems with security in the cryptocurrency space, they seem to have partnered in a more serious and permanent capacity. So, what is their plan?
Wirex is currently developing a program that will “red flag any wallet addresses” that may signal fraudulent activity. This system will remove the flagged address from the cryptocurrency platform, preventing them from completing any sort of fraud.
If this program is successful, it will be a simple and effective way of legitimizing cryptocurrency platforms and making them more trustworthy for users around the globe. However, this system is still in the development stage.
To learn more about this case or other forms of cryptocurrency fraud, contact Newman & Shapiro today!