Group-IB x Paxful Success Story

Background

Despite being massively popular, cryptocurrencies like Bitcoin are relatively new to the fintech world, meaning that they are more likely to be the subject of fraud, including scams related to cloud mining, Bitcoin emails, production, and the digital wallet. Paxful is well aware of this phenomenon and actively monitors for scam attempts on its platform. Once identified, the scam is eliminated, and any aftermath mitigated.

However, Paxful’s own rise in popularity was accompanied by a spike in fraudulent activity. The company could always mitigate fraud after the fact but lacked the necessary resources to prevent fraud before it affected customers.

Why Group-IB

When it came to finding a solution, there was never a question of choice. Paxful had been aware of Group-IB’s leadership in the cybersecurity community and was eager to try its Fraud Protection product. For Paxful, Group-IB Fraud Protection had everything they needed – fingerprinting and API for smooth integration. All for a reasonable price.

It was Group-IB’s fingerprinting technology, in particular, that caught Paxful’s eye. Device fingerprinting detects fraudulent activity from the same device even if browsing history is deleted or other cover-up tools implemented. A wide range of algorithms analyzes the same set of parameters to provide advanced dynamic analysis. The process identifies malicious activity across separate clients.

These features took Paxful’s fraud investigation capabilities to the next level. Before the implementation of Fraud Protection, the company was only able to deal with existing fraud schemes. Now, they can prevent fraud before it ever harms their customers.

In particular, Fraud Protection helps Paxful detect and prevent bad bot activity and highlight requests from high-risk or fraudulent internet service providers (ISPs). The system also identifies requests from virtual machines, since a low-cost method of concealing a real device fingerprint involves creating a virtual machine simulating the device and then deleting it once the fraud is complete.

Paxful also leverages the deep customization of Fraud Protection’s rule engine to fill existing security gaps and improve fraud prevention measures.

The power of visual analysis has helped Paxful’s anti-fraud and cybersecurity departments visualize the fraud schemes and devices linked with fraudulent accounts, thereby providing deep investigation capabilities. Moreover, the clientless analysis of malware that targets end-user devices maintains user privacy and operational security.

Paxful’s experience with the system itself was very good. Initial deployment only took 1.5 months, after which JavaScript started sending information to the Fraud Protection server. Full integration was complete after 6 months. Paxful found working with Group-IB’s specialists effortlessly. They were always responsive and helpful and acted quickly when needed.

About Group-IB solution

Group-IB Fraud Protection is a client-side fraud prevention solution working across sessions, platforms, and devices in real time.

Group-IB Fraud Protection effectively detects and prevents dangerous activities through behavioral analysis, anomaly detection, daily automatic filter rules, and signature updates based on unique data from Group-IB’s Threat Intelligence and Digital Forensics Lab. The combination of advanced anti-fraud technologies and intelligence protects both banking and retail customers. Moreover, it helps businesses comply with legal requirements designed to protect funds belonging to individuals and companies against scammers.

Fraud Protection analyzes all sessions and user behavior in both web resources and mobile applications, thereby creating a unique device fingerprint that distinguishes between normal and suspicious devices, all the while helping AML teams identify money laundering networks. If illegitimate activity is detected, Fraud Protection either sends an automatic notification in real time or blocks the fraudulent activity altogether.

The above features make Fraud Protection a reliable solution for effectively preventing cross-channel and cross-bank fraud.

Results

Three departments work with the Fraud Protection interface directly: customer care, compliance, and security. Customer care mostly handles terms of service (TOS) violations, while compliance deals with anti-money laundering (AML) rule violations and security with hacking cases.

All in all, Fraud Protection turned out to be a game-changer for Paxful’s business. With both offensive and defensive capabilities in its toolkit, the online platform will be able to better protect their customers’ assets and transactions in the future.

In just 2 months, Fraud Protection helped Paxful detect upwards of:

Armed with a new sense of security, customers will more likely recommend the Paxful platform to their friends and peers, resulting in a win-win scenario for all sides.