Combating Fraud in Crypto in 2025: Podcast Ep. 142

Episode 142 of the Public Key podcast is here! Fraud is the leading concern for many traditional and crypto companies navigating the non-face to face onboarding process and today we bring back one of our most popular episodes, as we speak with Tommy Nicholas (CEO of Alloy), who has been helping companies combat fraud for over 8 years. We also stitch in some recent insights from Rich Scioli, Alloy's General Manager of Global Fintech. Rich brings us up to speed on the latest in fraud prevention, crypto security, and gives us the real story behind the rise and fall of embedded finance.

You can listen or subscribe now on Spotify, Applegold Audible. Keep reading for a full preview of episode 142.

Public Key Episode 142: Your fraud model is broken and here is why

When Tommy Nicholas (CEO of Alloy) wrote a blog titled, Your Fraud Model Is Brokenyou had to know he and Ian Andrews (Host) were going to have a fun and insightful conversation.

This episode was originally published on December 5, 2023, where Tommy discussed how early NFTs and Bitcoin transaction speeds got him interested in the space and years later his company Alloy is now servicing Fintechs, Crypto and TradFi companies managing their compliance, AML, credit, and fraud risk.

He explains the broken fraud model and the need for a shift in approach to focus on the person rather than just the transaction. He emphasizes the importance of transparency and accountability by regulators in the industry and the burdensome requirements placed on the private sector.

To share insights since the episode was published last year, we added fresh commentary from Rich Scioli, Alloy's General Manager of Global Fintech. Rich brings us up to speed on the latest in fraud prevention, crypto security, and gives us the real story behind the rise and fall of embedded finance.

Quote of the episode

“It's not enough to just look at traditional KYC sources or run diagnostics on email addresses, thinking about the strategies that maybe were 5 or 6 years ago, where leading institutions are investing in, is really going broad and deep. So looking at, you know, points of interaction, the way individuals are interacting with online forums, looking at geolocation data, looking at IP data, looking at consortia data.” – Rich Scioli (General Manager of Global Fintech, Alloy)

Minute-by-minute episode breakdown

• (2:10) – Alloy's role in managing wide variety of risks for companies dealing with money
• (5:08) – Alloy as an operating system for risk management instead of just another risk solution
• (7:23) – The frustration behind the blog “Your Fraud Model is Broken”
• (14:33) – The burden and costs of money laundering controls on the private sector
• (18:27) – The inefficiency of processing suspicious activity reports
• (19:50) – Updated: The State of Embedded Finance Report Key Takeaways
• (22:56) – Threat actors taking advantage of online onboarding
• (30:03) – How Alloy got into the crypto industry and fraudulent practices they have identified
• (32:15) – Updated: The evolution of fraud going towards 2025 and beyond
• (33:13) – Involvement in the NFT community and the potential of digital collectibles
• (36:45) – Updated: Cross border payments, stablecoins and everything in between
• (42:00) – International look at fraud and compliance for the fintech / crypto industry
• (47:00) – Updated: What to look out for from Alloy and the crypto industry

Related resources

Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.

Speakers on today's episode

This website may contain links to third-party sites that are not under the control of Chainalysis, Inc. or its affiliates (collectively “Chainalysis”). Access to such information does not imply association with, endorsement of, approval of, or recommendation by Chainalysis of the site or its operators, and Chainalysis is not responsible for the products, services, or other content hosted therein.

Our podcasts are for informational purposes only, and are not intended to provide legal, tax, financial, or investment advice. Listeners should consult their own advisors before making these types of decisions. Chainalysis has no responsibility or liability for any decision made or any other acts or omissions in connection with your use of this material.

Chainalysis does not guarantee or warrant the accuracy, completeness, timeliness, suitability or validity of the information in any particular podcast and will not be responsible for any claim attributable to errors, omissions, or other inaccuracies of any part of such material.

Unless stated otherwise, reference to any specific product or entity does not constitute an endorsement or recommendation by Chainalysis. The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Chainalysis employees are those of the employees and do not necessarily reflect the views of the company.