As cryptocurrency adoption grows across the globe, so too does the dark shadow of fraud. In 2024 alone, nearly $10 billion was lost to crypto-linked scams, highlighting the urgent need for a shift in strategy from simply reacting to fraud to preventing it before it begins.
The threat is especially pronounced in regions like the UAE, where rising digital adoption has brought with it a new wave of financial manipulation. Many residents are already familiar with voice-based fraud, with criminals posing as officials to trick people into revealing personal information. But now, these tactics are evolving. Scams are becoming more intricate, leveraging the very technology that powers legitimate digital finance.
Crypto: The Payment Method, the Bait, and the Escape Route
Crypto fraud today is rarely just a matter of simple theft. It often presents itself in multifaceted forms. In some scams, digital currency is merely the payment method; in others, it’s the product itself used to lure unsuspecting victims into bogus investments. In still more cases, crypto acts as the escape hatch, laundering illicit funds across unregulated exchanges, mixers, and through chain-hopping tactics to conceal their origins.
“Meeting a threat of this complexity and scale demands an equally sophisticated and coordinated response,” said Nicola Buonanno in a recent Gulf News special. “We cannot rely solely on innovation, nor can we educate or collaborate our way out of a trillion-dollar problem.”
This nuanced threat landscape calls for more than awareness. It requires a smarter, more proactive system of defence.
Using the Scamsters’ Own Tools Against Them
One of the most effective shifts, experts argue, lies in flipping the tools of the scammers back on themselves. Instead of relying solely on reactive measures, financial institutions and regulators are turning to predictive technologies tools that can detect patterns before money even moves.
“Using advanced analytics and dynamic risk scoring, scams can be fingerprinted as they emerge,” Buonanno explained. “Whether it is a new phishing contract, a token, or a series of wallets laundering funds, these indicators can be analysed in real time.”
Machine learning models are becoming particularly valuable in this arena. By examining transaction histories, wallet behaviour, and on-chain activity, systems can generate risk assessments even before a transaction is approved. Early warning signs, once surfaced, give institutions the opportunity to intercept scammers before victims are defrauded.
This predictive edge is increasingly viewed as the only sustainable defence in a digital environment where new scam tactics emerge at lightning speed.
Awareness Still Matters But It Must Evolve
Despite the rise of sophisticated tools, public awareness remains a crucial pillar of fraud prevention. Authorised push payment (APP) frauds often rely on manipulating trust, urgency, or impersonation to get victims to act without thinking. That’s why educational campaigns continue to play a critical role.
In the UAE, the Cybersecurity Council’s StaySafe campaign, launched in partnership with telecom companies, has focused on teaching residents how to spot and avoid phishing attempts and other common fraud tactics. But as Buonanno warns, awareness efforts must be “sustained, adaptable, and, importantly, paired with technical advancements.”
Education alone won’t be enough to kerb the rising tide. It needs to be backed by smarter, faster systems that can act when consumers cannot.
Cross-Border Collaboration Is Key
One of the most challenging aspects of crypto fraud is its borderless nature. Funds can move from country to country within seconds, making it difficult for any single jurisdiction to act decisively. That’s why international cooperation is becoming a vital tool in the fight.
“Public-private investigation sprints across jurisdictions have demonstrated how real-time intelligence sharing can prevent losses before they occur,” noted Buonanno.
These collaborative efforts between regulators, financial firms, tech providers, and governments are proving effective at plugging gaps and speeding up response times. More of this, experts say, is essential.
Building a Safer Crypto Future
As crypto adoption continues to expand, so too will the threats that exploit it. But with the right mix of prevention-focused tools, public education, and international collaboration, experts believe the industry can turn the tide.
Ultimately, the goal isn’t just to stop scams as they happen but to create an environment where they’re harder to start in the first place. If successful, the very technology that enabled fraud could become the strongest weapon against it.
