Sumsub Says Africa Crypto Markets Show Lower Fraud Rates As…

Crypto platforms across Africa are showing improved fraud prevention performance, with verification-related fraud rates declining by 28 percent year-on-year, according to new data released by Sumsub. The findings point to a shift in how digital asset firms across the region balance compliance, onboarding, and operational controls as regulatory frameworks take shape.

The report, based on internal data from 2024 to 2025 and a survey of 300 crypto companies, suggests that the industry is moving away from earlier growth models toward a more structured approach. Globally, 74 percent of crypto providers now prioritize verification accuracy over onboarding speed, compared to 39 percent that still emphasize rapid user acquisition.

This change is particularly visible in Africa, where digital finance adoption continues to expand alongside regulatory oversight. Markets such as South Africa, Nigeria, Kenya, Ghana, and Mauritius are increasingly defined by the interaction between compliance requirements and user experience.

Why Are Fraud Rates Declining Across African Crypto Markets?

The data shows that fraud rates across the continent rose from 1.7 percent in 2023 to 3.6 percent in 2024, before declining to 2.6 percent in 2025. This represents a 28 percent reduction from the previous year, suggesting that improvements in verification processes and fraud detection systems are beginning to take effect.

The report attributes part of this trend to the region’s mobile-first fintech ecosystem, where onboarding processes are designed for smartphone users and integrated with digital identity tools. These systems allow platforms to verify users more efficiently while maintaining compliance with emerging regulatory standards.

Hannes Bezuidenhout, Vice President of Sales Africa at Sumsub, commented, “Africa’s crypto ecosystem is entering a phase where operational discipline matters more than momentum. As platforms scale, the focus is shifting from how fast they can grow to how effectively they can operate under increasing regulatory scrutiny.”

Despite the overall decline, fraud levels vary across individual markets. Ghana recorded a rate of 4.6 percent, South Africa 3.1 percent, Nigeria 2.6 percent, and Kenya 2.5 percent. In some countries, including Senegal, Mali, Tanzania, and Uganda, fraud rates exceeded 5 percent in 2025, indicating uneven progress across the region.

The persistence of fraud in certain markets reflects continued exposure to scams and mule account activity, particularly as crypto adoption expands alongside mobile payments and digital banking services.

How Is Regulation Shaping The Crypto Landscape In Africa?

The report highlights a series of regulatory developments across key African markets, indicating a broader shift toward formal oversight of digital assets. Governments are introducing frameworks aimed at integrating crypto into existing financial systems while addressing financial crime risks.

South Africa implemented Travel Rule requirements in 2025 and introduced new tax reporting obligations under the Crypto-Asset Reporting Framework in 2026. Nigeria passed legislation recognizing virtual assets as securities under the supervision of its Securities and Exchange Commission. Kenya established licensing requirements for service providers, while Ghana is preparing similar legislation. Mauritius continues to develop its regulatory framework as part of its strategy to position itself as an international financial center.

These measures are contributing to what the report describes as a phase of “regulated maturity,” where compliance and operational processes are embedded within product design rather than treated as separate functions.

The adoption of the Travel Rule remains uneven globally, with only 23 percent of providers reporting full compliance. This suggests that while regulatory frameworks are expanding, implementation challenges persist across different jurisdictions.

What Role Is AI Playing In Fraud And Verification?

Artificial intelligence is becoming central to both fraud detection and fraud attempts. According to the report, 57 percent of providers identify AI-driven fraud detection as their top security priority, reflecting the growing complexity of threat patterns.

Bezuidenhout commented, “Attackers are using automation and generative tools to scale fraud attempts faster than ever. Defenders need systems that can respond in real time across identity, behaviour, and transaction data.”

The report indicates that the next stage of competition in the sector will depend on how effectively platforms integrate verification systems across the entire user lifecycle. This includes combining identity checks, behavioral analysis, and transaction monitoring within a unified framework.

At the same time, user experience remains a factor. The report notes increased adoption of document-free onboarding and reusable identity systems, which allow users to verify across multiple platforms without repeated submissions. In 2025, non-document verification achieved pass rates of 92 percent in Nigeria, 93 percent in Kenya, and 94 percent in South Africa.

Ilya Brovin, Chief Growth Officer at Sumsub, commented, “Regulated maturity means building better systems, not just adding more rules. The platforms that win will be those that embed verification into their product DNA and wrap automation in strong controls, transparency, and accountability.”

The interaction between AI-driven fraud and AI-based detection systems introduces an ongoing dynamic where platforms must continuously adapt. The effectiveness of these systems will influence both compliance outcomes and user adoption.

The report concludes that the future growth of crypto markets in Africa will depend on integrating compliance, fraud prevention, and onboarding into a single operational framework. As regulatory oversight expands and fraud techniques evolve, platforms that can balance these elements may be better positioned to scale.

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