Fraud rates linked to verification processes across Africa’s cryptocurrency market declined by 28 percent year-on-year in 2025, indicating improved compliance systems and stronger identity verification frameworks across digital asset platforms, according to new industry data.
The findings were contained in a report by Sumsub, a full-cycle verification and compliance platform, which examined internal industry data from 2024 to 2025 alongside a survey of 300 crypto companies globally.
The report reveals that Africa’s digital asset sector is gradually transitioning from rapid user acquisition models to more structured compliance-driven operations, as regulatory oversight intensifies across key markets.
Globally, 74 percent of crypto service providers now prioritise verification accuracy over onboarding speed, compared to 39 percent that still focus primarily on rapid expansion, reflecting a broader industry shift toward regulatory alignment and risk control.
In Africa, the evolution is particularly evident across markets such as South Africa, Nigeria, Kenya, Ghana, and Mauritius, where growing crypto adoption is increasingly intersecting with emerging regulatory frameworks.
According to the data, 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 drop represents a 28 percent reduction year-on-year, suggesting that enhanced verification systems and improved fraud detection tools are beginning to yield results.
The report attributes part of this improvement to Africa’s mobile-first fintech ecosystem, where onboarding processes are increasingly designed for smartphone users and integrated with digital identity systems that improve verification efficiency while maintaining compliance with evolving regulations.
Commenting on the development, Hannes Bezuidenhout, vice president of Sales Africa at Sumsub, said the continent’s crypto industry is entering a more disciplined phase of growth.
“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,” he said.
Despite the overall decline in fraud rates, the report noted significant variation across individual markets. Ghana recorded a fraud rate of 4.6 percent, South Africa 3.1 percent, Nigeria 2.6 percent, and Kenya 2.5 percent. Other countries, including Senegal, Mali, Tanzania, and Uganda, recorded rates above 5 percent in 2025, highlighting uneven progress across the region.
The report also points to accelerating regulatory developments across Africa’s digital asset landscape, as governments move to formalise oversight and integrate cryptocurrencies into existing financial systems.
In South Africa, Travel Rule requirements were implemented in 2025, alongside new tax reporting obligations under the Crypto-Asset Reporting Framework introduced in 2026. Nigeria has enacted legislation recognising virtual assets as securities under the supervision of its Securities and Exchange Commission, while Kenya has introduced licensing requirements for service providers. Ghana is advancing similar regulatory proposals, and Mauritius continues to refine its framework as part of efforts to position itself as an international financial hub.
According to the report, these policy shifts are contributing to what it describes as a phase of “regulated maturity,” where compliance is increasingly embedded within product design rather than treated as a separate operational function.
However, implementation remains uneven. Only 23 percent of global providers report full compliance with the Travel Rule, underscoring persistent gaps between regulatory intent and operational execution across jurisdictions.
The report also highlights the growing role of artificial intelligence in shaping both fraud prevention and cybercriminal activity within the sector. About 57 percent of providers identified AI-driven fraud detection as a top security priority, reflecting the increasing sophistication of threat patterns.
Bezuidenhout noted that fraud tactics are also evolving alongside defensive systems.
“Attackers are using automation and generative tools to scale fraud attempts faster than ever,” he said. “Defenders need systems that can respond in real time across identity, behaviour, and transaction data.”
Beyond security, the report points to a growing emphasis on user experience within compliance frameworks. Platforms are increasingly adopting document-free onboarding and reusable identity systems that allow users to verify across multiple services without repeated submissions.
In 2025, non-document verification recorded pass rates of 92 percent in Nigeria, 93 percent in Kenya, and 94 percent in South Africa, reflecting growing efficiency in digital identity verification processes across the region.
Ilya Brovin,chief growth officer at Sumsub, said the future of the industry will depend on how well platforms integrate compliance into their core systems.
“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,” he said.
The report concludes that the next phase of growth in Africa’s crypto sector will depend on the integration of compliance, fraud prevention, and onboarding into a unified operational framework. As regulatory scrutiny intensifies and fraud tactics evolve, platforms that can balance security, efficiency, and user experience are likely to be best positioned for sustainable expansion.
