In Crypto, Trust Is the Product Now

Three-quarters of crypto companies now say they would rather verify a user correctly than onboard them fast. That single data point, drawn from Sumsub's fourth annual State of the Crypto Industry report released in March 2026, tells you almost everything you need to know about where the industry stands today.

For years, speed was the metric that mattered. How quickly could a platform move a new user from signup to first trade? How little friction could it introduce before someone abandoned the process entirely? The companies that won were often the ones that asked the fewest questions. That model is over.

Sumsub's 2026 report draws on internal verification data from over 23,000 fraud attempts analyzed daily across 2024 and 2025, alongside survey responses from 300 crypto companies outside its own customer base. The picture it paints is of an industry that has internalized that shortcuts in compliance create costs that arrive later and hit harder.

Now, seventy-four percent of crypto providers prioritize verification accuracy over onboarding speed. Only 39% say speed is their primary concern. That gap between the two numbers would have looked very different in 2022 or 2023, when user acquisition was the dominant pressure and regulators were still figuring out what they wanted.

The fraud picture is more complicated. The overall fraud rate stayed flat at 2.2% from 2024 to 2025, which sounds reassuring until you understand what that stability actually means. According to Sumsub, the threat itself has not plateaued; it has professionalized. The attacks are more targeted, more automated, and increasingly driven by AI. Deepfake fraud targeting businesses is now an established tactic, not an edge case. In 2025 alone, deepfake-related crypto scams caused over $200 million in losses. Generative AI is being used to produce realistic counterfeit identity documents capable of slipping past legacy verification systems. Over half of the companies surveyed (55%) have confirmed they experienced fraud at least once in 2025. Another 15% were not sure whether they had been hit at all, which is its own kind of problem.

User pass rates improved despite all of this. Across the platforms Sumsub works with, 94% of all verification attempts succeeded on average, up one point from 2024. That improvement sounds modest in percentage terms, but across millions of onboarding events, it represents a meaningful number of legitimate users who got through without friction that would previously have stopped them. The industry managed to get stricter and smoother at the same time.

The regulatory backdrop is what is forcing the pace of this change, and in 2026, it is genuinely demanding.

In Europe, the Markets in Crypto-Assets regulation has moved from ramp-up to enforcement. The transitional period that allowed existing providers to operate while seeking authorization ends across all EU member states by July 2026. Firms that are not licensed by then face the prospect of shutting down regulated services in the bloc entirely. The EU's Transfer of Funds Regulation, which came into force in December 2024, removed any minimum threshold for data-sharing requirements between crypto-asset service providers. Under its terms, every inter-platform transfer, regardless of amount, must carry full originator and beneficiary information. A five-euro transfer between two EU-licensed exchanges carries the same compliance requirements as a five-hundred-thousand-euro one.

The Financial Action Task Force, the global standard-setter for anti-money laundering, has been explicit about unhosted wallets, the self-custody wallets that sit outside the institutional infrastructure of exchanges. FATF has warned that peer-to-peer transfers using unhosted wallets present elevated risks for money laundering and sanctions evasion precisely because they bypass the oversight that traditional intermediaries provide. Crypto businesses are now being asked to build verification processes that can handle the full complexity of this environment without creating onboarding experiences so burdensome that legitimate users walk away.

The most interesting finding in Sumsub's report is not any single statistic. It is the underlying argument that treating compliance and user experience as opposing forces is a mistake in the first place.

Two trends are gaining real traction among what the report describes as future-oriented platforms. The first is non-document onboarding, which verifies users without requiring them to upload identity documents. The second is reusable identity, which allows a verified user to carry that verification across multiple platforms without going through the process again. Both approaches reduce friction for legitimate users while improving the quality and portability of the verification itself.

Ilya Brovin, Chief Growth Officer at Sumsub, described the challenge in terms that are worth sitting with: the central problem in an AI-powered world is how verification systems can continuously outmaneuver AI-driven fraud without eroding user experience or auditability. That is not a compliance problem. It is a product and infrastructure problem. The platforms that solve it, Brovin argues, will not merely meet regulatory expectations. They will define what trust looks like in crypto going forward.

Andrew Sever, Sumsub's CEO, framed it at the operational level. The conversation has shifted, he said, from how fast can we grow to how well can we scale under scrutiny. Regulatory execution, fraud resilience, and onboarding efficiency are no longer separate challenges. They are connected parts of the same system.

For businesses that sit at the intersection of crypto and payments, the direction of travel here has direct implications.

Crypto payments

depend on trust at the point of transaction. Every off-ramp, every

payment link

that converts digital assets into settled value, every cross-border transfer that touches regulated infrastructure is subject to the same compliance requirements that are now being enforced across exchanges and custody providers. The Transfer of Funds Regulation does not carve out payment providers. MiCA does not treat on/off-ramp operators as a separate category outside its reach. The rules apply.

What the Sumsub data shows is that the companies handling this best are not the ones that built the most complex compliance stacks. They are the ones that embedded verification into their product architecture early, so that the compliance layer and the user experience layer work together rather than against each other. The 94% pass rate figure is the clearest evidence of this: strict and frictionless can coexist, but only if the system is designed with both goals in mind from the start.

Africa provides a useful data point on what happens when regulation and improved infrastructure combine. Crypto fraud rates across the continent fell 28% year-on-year in 2025, coming down from 3.6% in 2024 to 2.6% in 2025. Countries including Kenya, Nigeria, and South Africa have been advancing regulatory frameworks for virtual asset service providers, pushing firms toward stronger KYC and anti-money laundering standards. The fraud drop followed. That is not a coincidence.

The crypto industry has spent a decade arguing about whether regulation was coming, and if so when, and on whose terms. That argument is settled. The question now is which companies built the infrastructure to operate credibly inside a regulated environment, and which ones treated compliance as a problem to be deferred.

Sumsub's data suggests the industry is getting this right more often than it used to. Pass rates are up. Fraud rates, while not declining, have not exploded despite a more hostile threat environment. The shift from speed to accuracy as the primary priority among three-quarters of providers is a real change in how the sector understands its own interests.

The companies that will define the next phase of crypto, in payments and everywhere else, are the ones that figured out that trust is not a tax on growth. It is the thing that makes growth sustainable.

Sources: Sumsub State of the Crypto Industry 2026, Crowdfund Insider, Morningstar/PRNewswire, Financial IT, BitKE, FATF Recommendation 16, EU Transfer of Funds Regulation (2023/1113), MiCA (EU Regulation 2023/1114)

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