Nearly 1 in 4 adults in the US have had their account taken over by a fraudster; since 2019, attacks are up 3x, and in 2021, losses increased by 90%.

Compounding this issue is that account takeovers (ATOs) are notoriously hard to detect effectively.

Detecting ATO often means Fintech wallets and merchants “step up” customers and add friction to the experience. This creates cost, reduces revenue, and frustrates consumers.

But there is a better way.

What is Account Takeover?

Account Takeover is when a fraudster accesses a genuine customer’s account. This attack can happen to any account email, social, subscriptions, bank, or credit card.

Once they have access to an account, they can make fraudulent transactions, use loyalty points, collect customer data to sell, and even change the password to lock the customer out.

To the merchant or Fintech wallet, these attacks often look like legitimate logins.

Why is ATO getting worse?

Following a wave of data breaches and the rush to digital and e-commerce during the pandemic, fraudsters became more creative. They began to operate at scale, overwhelming traditional approaches to ATO detection.

To the service provider, the account appears to have logged in with a legitimate username and password. This authenticated user may not trigger a fraud control unless the merchant or Fintech wallet is intentionally looking for things out of the ordinary.

We need to move faster to create a safer environment for users online.

How Do Criminals Get Your Account Information?

Step 1: Get a Password

The user/password is leaked from one of the breaches, and there is a good chance of the same password being reused by most of the victims at other sites.

Step 2: Get the OTP or “One Time Password”

The next step by the fraudster is to get any secure PIN codes your service provider might send you (for example, a one-time SMS code or email).

They have several attacks to get access to these passcodes (OTPs).

1. Sim Swap attacks The attacker convinces a mobile phone network (like AT&T, Verizon or Vodaphone) to “port” the phone number to a new device. Then when the OTP passcode is sent, it would go to the attacker, not the victim.
2. Phishing attacks Convince the customer to hand over OTP and can work two ways
   a) Fake websites or emails: Fraudsters create websites, emails or invoices that look like a legitimate business that the customer works with and an account issue.
   b) Intimidation: Using pressure or scare tactics against the customer to persuade them to share their OTP
3. Stolen Devices A device is stolen after the fraudster can see the mobile phone PIN or code used by the victim. By stealing the device, the fraudster can now receive an OTP email or SMS, which allows them to easily login to the customer’s provider (e.g., their bank or Fintech company).
4. Malware Malware is software, an app that compromises the device when installed. This can be installed by clicking a bad link (like in Phishing) or delivered via spam and other adverts.

Step 3: Commit Fraud

Once the fraudster has access to the account, they can empty it, use it for illicit activity, or make purchases as if they were the user.

And the Fintech wallet or merchant would only find out when the user contacts them.

Traditional approaches are not preventing ATO

One solution is to use device fingerprinting. Many merchants and service providers will use signals from the device, like browser settings or the mobile phone’s unique IMEI number to ensure a user is logging in from the device they used previously. If the device changes, the service provider will look for an additional layer of security, often called a “step up.”

In a Fintech wallet use case, users logging in from a new device may be asked to provide additional authentication (e.g., verifying with a code sent via email or SMS). This second authentication factor gives the service provider confidence they have a legitimate user.

With the explosion of account takeover attacks and volume, more good customers are getting caught by step-up 2-factor authentication.

These false positives create friction and frustration for users, creating cost and churn for Fintech wallets and merchants.

The need for fine-grained detection

Simply looking at the device and login event in isolation misses the bigger picture. To prevent more ATO fraud, organizations should.

1. Combine device signals with behavior. Not all device signals are created equal, and fraudsters have figured out how to spoof locations and other key device signals. But when you combine smaller, often less considered device characteristics with how the device is being used (the behavior), you can detect more fishy behavior.
2. Combine data sources to create better insights. Databases from 3rd parties include credentials known to have been hacked or mobile phone numbers that have historically been used for fraud elsewhere. Combine these with the device and behavior and build a complete picture.
3. Detect remote software. Very few good users login to their accounts via remote screen-sharing software. For the fraction that does, the additional friction of step-up authentication allows them to log in successfully.
4. Detect emulators. Almost no good users emulate their mobile device on a laptop or another device.
5. Watch for anomalies across the entire customer base. With fine-grained device signals it is possible to see if multiple users and login attempts all have a similar pattern where something looks fishy.
6. Implement a “Same User Score.” If a phone gets stolen or compromised by malware, the same user score allows merchants to detect risky behavior on the same device.
7. Data Breaches. Proactively monitor other data breaches for your customers.
8. Sim Swap. Identify potential SIM swaps through data feeds and anomaly detection.

Why Sardine is unique

Sardine can detect the hidden clues and signals fraudsters leave behind in an ATO attack and deliver significant reductions in ATO.

Across our client base, we’ve seen incredible results when they deploy the full power of Sardine. One client reported a 34.8% ATO reduction in the first month of implementing Sardine (and we continue to optimize).

But the real win was reducing false positives by 63.9%!

Less friction. More fraud detected.

Sardine was built to combine data sets with device and behavior. We have more fine-grained signals than the competition, which helps us detect fraud and reduce false positives.

Of course, we can’t tell you precisely how we do that (if you know, you know).

We’re about results.

And we’d love to help you get them.

If you want a demo, why not contact us?

Detect more Account Takeover (ATO) with Sardine was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

The word partnership gets thrown around a lot lately. “Hey, we should partner!” This is the opening line of every business development pitch in your LinkedIn inbox, but at Sardine, partnership means much more than “become a client and buy from us.”

When we partner, we go all in.

One of our key partners is Blockchain.com. Since implementing Sardine, they’ve already seen card fraud decrease and reduced false positives without a drop in legitimate customer volumes.

Put another way. Less fraud, zero increase in false positives.

Performance is everything, and Blockchain.com’s success is something we’ll keep working together on because Fraud is constantly evolving, and risk can never be eliminated. When evaluating fraud partners, Blockchain.com looked for three things.

1. No black boxes (sharing data)
2. Sharing signals, not just scores
3. Working as one team

Partners share data.

Returning a score without context isn’t helpful.

Often fraud tools will only give a score (e.g., a single output like low, medium, or high risk or 0 to 999). Operators must trust how the vendor got to a medium or high-risk decision, but that might not work for their business or geo. These fraud solutions must sit within the fraud teams’ payments and risk stack. They’re usually not the only platform; they sit alongside internal tools and other 3rd party solutions.

A high score could be a false positive for one business but a fraudster for another. Each company’s fraud and risk team understands its risk model best.

Every false positive is a lost sale and lost revenue.

Sardine’s platform returns everything in an API response. Our partners are then free to use that as they see fit. Either they can let the Sardine platform recommend a response, create a rule from the data or use it to feed an internal system or queue.

Fine-grained signals are essential

In fraud prevention, each data point is a signal, but each signal means different things depending on the scenario. For a business that operates cross-border payments, having many devices and users making foreign transactions is a usual behavior; for others, it might not be.

Sardine provides a unique mix of device and behavior signals, allowing partners to pull those into their ML models and rules engine. We also provide anomaly detection, where if something looks suspicious, we’ll send that signal based on what we see in our network.

Historically, device or behavior signals were built to find e-commerce fraud, but the Fintech wallet, Crypto, and money-loading use cases are much more complex. These use cases need to look for different patterns and risks.

As every company becomes a Fintech company, we’re finding that every company is wrestling with wallet, funding, payment scams, and fraud use cases. Fine-grained signals are especially valuable for our enterprise clients, who have sophisticated fraud stacks and multiple vendors on a global stage.

Catching fraud means working as one team.

Every merchant, wallet, fraud prevention tool, and financial institution has the same aim: to reduce risk as much as possible without adding too much friction for good customers. However, each organization can only see its customers and associated risk data. Each of us holds a puzzle piece, but the bigger picture isn’t always clear unless we collaborate.

At Sardine, we aim to be the most proactive extension of your team you could wish to hire.

Together we have one goal — Safer, Faster payments.

Sardine understands how to get the most out of the data and ML we operate, and we’re constantly working to help partners get better performance.

Partners shape our roadmap and help us understand where we fit in their big picture.

If you’d like a partner who can help you get better performance contact us

Blockchain and Sardine are redefining partnerships was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today “work from anywhere” is a massive and growing trend, but it is a painful reality of high fees, FX, and admin for workers. Stablecoins enable global workers to be paid like a local, no matter where they live. Still, platforms have avoided going deep with Stablecoins for the additional regulatory, liquidity, and operational challenges they present to support globally.

Sardine can change this and has built the safest, fastest way to pay workers internationally.

Global workers need better global payouts

“Work from anywhere” has been life-changing for hundreds of millions of people. Talented workers in the global economy can find high-paid work from western companies, and domestic talent can live and work wherever they choose.

More flexible working arrangements are here to stay. 1.56bn people work as self-employed or freelancers. Statistics from LinkedIn show that despite only 14% of jobs being remote, those jobs receive 50% of applications.

If employers embrace “work from anywhere,” they benefit from a global talent pool that may be more affordable or skilled than they have in their local labor market.

The workforce for many companies is becoming default global, but the simple act of getting paid is not default global. The market needs a better solution for paying remote workers that works in any currency and don’t penalize workers for currency exchange.

Getting paid internationally is still too hard

If the worker being paid is outside the US or lives in the US and wants to remit money outside of the US, they face a series of challenges.

1. Most platforms pay in dollars and leave the worker to figure out how to get those dollars into local currency to be available to spend on essentials like rent, food, and wifi.
2. Many remittance solutions are expensive, meaning workers lose a portion of their paycheck to fees
3. In some high-inflation markets (like Argentina), using the banking system to convert to local currency can reduce a worker’s income by up to nearly 2.5x in real terms!

Global remittances hit $720bn in 2022 and are forecast to hit $850bn by 2028. Additionally, demand for monthly withdrawals in Crypto more than doubled over the time period from July 2021 to Jan 2022. This demand for Crypto withdrawals primarily comes from LatAm (47%) and EMEA (24%). Unlike their domestic counterparts whose paycheck lands in their account, international workers have additional admin and costs to manage.

Payroll platforms default to domestic currencies

Payroll platforms often require a traditional banking or account endpoint to pay workers. In the US context, this means having a US bank account. Their operational, regulatory, and FX exposure for platforms increase as they move into international payments.

This is challenging for the recipients to manage,

For example, suppose an Argentinian citizen gets paid by a US company.

If the company sends an international remittance through their bank to Pesos, they get only 170 pesos to the dollar, given the official exchange rate. If they were to go to a “Cueva” in the blue market — they would be getting 350 pesos to the dollar. Taking such a huge pay cut is not attractive.

This leaves two options.

1. Open a US bank account as a non-us resident. This is difficult, even though perfectly legal. It can be done but it is challenging.
2. Open a balance with TransferWise or Payoneer. Opening these is slightly easier; they come with a local account and routing number.

Once you have USD, you still have to spend it and use it to pay utility bills.

Again there are two legal options:

• Fly to Miami or NYC and withdraw cash from the bank account (around $10–20k). Fly back to Argentina, store it in a safe or a box, and go to the Cueva whenever exchanging it back to Pesos.
• Have a friend in the US manage the USD and convert it when they visit Argentina. The user keeps USD in a Wise or Payoneer account and sends it to a friend or someone they trust in the US, which gives the user cash in person when visiting Argentina,

But now there’s a 3rd option.

Stablecoins are cash, and the Cuevas accept Crypto.

Stablecoins present another rail

Stablecoins have the advantage of being instant, global, and 24/7.

A compatible wallet is all anyone needs to pay or get paid in Stablecoins. They can then send that “dollar” to anyone almost instantly and nearly free.

1:1 backed Stablecoins (like USDC, GUSD, and USDP) are digital representations of the US dollar held at a regulated US financial institution or equivalent. Many of the largest Stablecoin providers are audited and store customer funds in dollars or dollar equivalents. While there is some regulatory uncertainty about the treatment of these assets, they are well understood by consumers.

This has become so compelling that some international worker platforms already offer wallet integrations for Stablecoins.

Barriers to adoption for platforms

If a platform chooses to support Stablecoins (or Crypto more broadly), they would need to

1. Source Stablecoin liquidity
2. Ensure compliance with BSA/AML for payments to consumers
3. Manage the integration to wallets.

Platforms often don’t want to store and manage Crypto; their default motion is to pay a bank account, which is also compliant with the Bank Secrecy Act (BSA) and Anti Money Laundering (AML) laws and rules. A regulated direct deposit account is subject to these checks within the US (as are its equivalents internationally).

A platform could be available to most Stablecoin-compatible wallets with relatively low lift integrations. Still, in doing so, they’d have to KYC each customer and take on the legal risk of paying someone in stablecoin rather than local currency.

Perhaps its time for a new approach.

A critical way to manage the risks associated with Stablecoins is to ensure all workers open a direct deposit account in their name in the US. The employer of record can then pay their workers exactly as they do today.

Many international workers don’t have a US account, and those that do might prefer the seamless transfer and better rates afforded by Stablecoin payouts.

What if we could offer a best-of-both-worlds scenario to platforms and workers?

Platforms pay the worker just as they would today to a bank account. It’s entirely possible if we can instantly remit money globally via Stablecoins. We need better on-ramps and off-ramps, and with all these things, the hardest part is managing compliance and edge cases.

Fortunately, that’s what we’re great at.

If you want to make payroll safer and faster, get in touch.

Global Workers need better Global Payouts was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

The elderly are often scammed out of thousands of dollars.

Targeting the over-60 population is not a new trick scammers use, but it is becoming increasingly common for digital payments. In recent years the sophistication of targeting and coaching the older population to use digital payments and crypto to pay for goods/services they never receive has exploded.

This increase in scams comes when regulators increasingly scrutinize Real-time payment rails, and the reputation of digital payments and crypto is in question.

The market is headed for a perfect storm where the increasing adoption of digital creates a larger population of potential victims.

We need to detect scams as they happen.

And to do that, we need to know how it works.

How the scam starts:

Senior scammers primarily target elderly populations due to a combination of

• Poor understanding of technology
• Larger bank account balances
• Vulnerability to high-pressure guidance from the scammer.

Scammers exploit these factors and patiently build trust and relationships with their victims over time. They use a trustworthy pretense (like selling an item or an investment opportunity). They use this trust to “coach” the victim through digital tools and crypto. This may include

1. Guiding the victim through KYC, with the victim’s real credentials
2. Remote screen sharing or screenshots when the user gets stuck
3. Sending funds to unspecified wallets or accounts

Why it’s hard to detect:

Most KYC processes can identify a stolen identity fairly quickly. However, detection becomes much more difficult when a real user has entered their real identity.

Take this real-world case study for example:

• 70+ old male
• Was connected to a scammer after responding to an advertisement for a camper
• Over the phone, the scammer guided the victim to download and create an account for a digital app.
• The victim filed a dispute when the camper was not delivered. In this case the merchant or sometimes the victim has to bear the brunt of the losses.

It doesn’t have to stay this way.

Better detection in real-time

It’s not enough to rely on KYC information to detect this behavior. Crypto and P2P payment services should look for signals that the user is under stress or if someone else is controlling the screen (in browser sessions) with tools like AnyDesk, TeamViewer, Zoom, Microsoft RDP, etc.

Scammers often instruct victims to take screenshots or record the screen so they can pass this information up their chain of command.

Scammers are often organized and intentional.

But if we’re organized and intentional, we can move faster.

When you combine this with looking for any fishy behavior, you have a much higher probability of detection.

Fraud detection must be always-on because scammers are.

But so are we.

Contact us today to learn more about how Sardine stops scams before they start.

Scam Prevention: Detecting elderly scams in new payment methods was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

The new 1Inch Android wallet is adding Sardine as an on-ramp option to help users get into DeFi Safer and Faster.

Fiat is still the most accessible way to start a journey into Crypto, and 1inch views direct on-ramps as a critical part of their new wallet infrastructure.

The 1inch wallet allows users to buy, sell and hold Crypto directly with multiple decentralized exchanges.

With Sardine and its instant ACH integration, users will avoid declined transactions which happen too often when paying with cards.

Plus, ACH facilitates higher limits. If users prefer to pay with cards, Sardine also prides itself on having the highest approval rates in the industry.

This option can be chosen when selecting “Instant Bank Transfer” among Sardine payment methods.

Sardine’s payment system enables instant purchases of over 30 tokens with a total value of up to $25,000/month. And all of this comes with Sardine’s fraud detection baked in.

At Sardine, we’re excited to be a part of the journey for users directly into DeFi.

Safer, Faster.

If you want to learn more, why not contact us.

Sardine partners with 1inch was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

There’s a new holiday you might not have heard of.

2022 saw the first-ever Sardine Self Care Day, an initiative for all of us to step back, recharge our batteries and focus on what gives us strength for the swim ahead.

While we offer unlimited PTO with a minimum of 2 weeks of mandatory vacation, scheduling a company-wide day for wellness allows us to take a collective breath.

It started with a slack message from our CEO Soups Ranjan.

We are excited to declare November 11, this Friday, as our first company-wide “self-care” day to disconnect. It’s a day off. So no slack, emails, or communication of any type is expected (unless completely unavoidable).

There is one condition: Please be sure to return with one picture or video of what special you did for no one else but yourself!

Scheduling a company-wide wellness day allows us to take a collective breath. It’s one small way to ensure that we are and will always remain committed to the well-being of our people.

What did we get up to?

Chandni went on a winter wonderland trip —

“Self-care day = Do what you love the most = Getting lost in woods during day and capturing magical sky at night!”

Ethan fired up the new 3D Printer —

“Bought a 3D printer and printed this over the weekend”

Giula did a little sensory deprivation.

“My self care day included disconnecting entirely and my semi annually sensory deprivation float session. Highly recommended. It’s 8 inches of warm salt water in complete darkness and silence. Nice little 60 min reset for your body. If you are claustrophobic, the first time might be a little uneasy but you get used to it.”

Soups and the gang went tide-pooling — “We spent the evening tide-pooling today! I find observing the sea creatures in their own habitat, as very curative”

Sophia passed her lifeguard test! —

“I passed the life-guard pre-test today. As a sardine, I know how to swim and hope I will know how to save others soon”

Self-care is not only outdoor. Sometimes staying in the comfort of their home and indulging in their favorite food with the people who matter the most is the best way to celebrate self-care. Kazuki enjoyed breakfast from his favorite bakery.

And that’s not all! Rob and his family planned a bowling time together; Sophia passed her lifeguard test. Other Sardine’s had a 5th wedding anniversary, repotted house plants, spent time with family and friends, and recharged. One of our business heads spent time at the VA hospital, where servicemen and veterans were recovering from injuries and various health issues.

We’ve got a lot to do and an industry to change.

We’re in the fortunate position of growing rapidly in a market that needs safer, faster payments now more than ever. There’s a mountain to climb, and we’re still a relatively small team. We work hard, and we push ourselves to do more every day, but more than anything, we remember why we’re doing this.

Last year the amount scammers stole from users increased by 70% to $.14bn in the US alone. That could be your parents, grandparents, or friends. Criminals exploit the most vulnerable in society and use the financial system.

We want to be part of stopping that. With better ML, better detective work, and better solutions for Financial Institutions to stop fraud before it happens.

The passion is real.

So is the opportunity.

If you want to join in, check out our careers page here.

Sardine’s self-care day 2022 was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

Conversion at checkout is the lifeblood of any merchant.

This is especially true for companies like Blockchain.com, which find that users are unlikely to return if they can’t access their service. But when a consumer has a good experience, they not only make the first transaction, they’ll go on to buy other cryptocurrencies and become repeat customers.

Conversion is critical.

Yet at the industry level, rejection rates are at least 20%, and Sardine has seen an average of 50%. There is a massive opportunity for new revenue if this number can be improved.

Blockchain.com has taken a radical approach to solve for conversion and is sharing its experience to improve outcomes across the industry. Blockchain.com has taken two distinct teams, Fraud and Payments, and combined them into one team with a singular focus–the same priorities, OKRs, and people.

Why?

Changing how you manage fraud changes everything.

“If you change how your payments stack works, you can improve revenues by basis points. Changing your fraud performance can improve your revenues by percentage points. It is a much more efficient use of time.”

— Jim Wang, Head of Payment Product, Blockchain.com

This doesn’t mean allowing more fraudsters in but keeping them out in the first place.

The key insight is that while less fraud is good for everyone, it just happens to create significantly better conversion. At Sardine, we think this will emerge as an industry best practice.

Before we dive into how you have to understand how fraud works.

The traditional approach to Fraud management

Fraud was always seen as a tax on business, and in many places still is. The fraud team aims to reduce fraud, often by introducing customer friction, and their OKRs, priorities, and team structure are aligned to reduce fraud. The payments team aims to increase conversion and would lobby the fraud team to reduce friction and be more permissive.

In traditional structures, this becomes an adversarial relationship.

What many operators eventually discover is that if you deeply understand fraud, you can actually significantly improve conversion rates.

Payments are easy; edge cases are hard.

Instructing a payment is simple for a merchant or Fintech business. Create a payment file (e.g., ISO8583), or send a message to an API with the relevant payment details, and the money should move.

The problem is it doesn’t always work that way. Payments will fail for a long list of reasons that aren’t apparent until you’ve spent some time in the industry.

As an example:

• Many payment companies have a default fraud rule set but lack experience in a particular industry (e.g., Crypto). This means lots of good customers get blocked (false positives) because rules about what gets declined were set somewhere else by someone else.
• Many fraud solutions lack the breadth of data needed to sort true fraud from things that look a bit like fraud (false positives). For example, if you only look at payment data, transaction amount, and the history of that card number, a payment might look like fraud. But if you look at the device, the user’s history on the platform, and their behavior, you can see it is a case of falsely identifying a good user as a fraudster (a false positive).

What’s more, fraudsters often know that growth companies lack sophistication when managing fraud. So they’ll take advantage of the gaps and make transactions that are unlikely to trip a wire in a default fraud approach.

Bringing these two problems together creates the ultimate win/win.

Less fraud, more conversion

Blockchain brought its fraud and payments teams together with a single priority: increase conversion and reduce fraud.

The goal is to create an experience where good users can join the platform (and, yes, generate fee revenue for Blockchain.com in the process), while fraudsters are less likely to be able to game the system.

“Investing in anti-fraud is a no-brainer based on the economics. Since we’ve taken this approach, we’ve seen fraud rates fall, and conversion is up by 10%. Since partnering with Sardine, we’re seeing that trend continue to improve.”

— Jim Wang, Head of Payment Product, Blockchain.com

A call to the whole industry

Blockchain.com hopes that by sharing best practices, we can enhance the reputation of the crypto industry as a whole.

But there’s another way to improve conversion and reduce fraud –sharing data about fraud patterns as an industry. This is common in traditional finance, but there had been no forum for Fintech and Crypto companies that was global, data-driven, and well-attended. Sardine intends to build one.

By sharing data, we spot common fraud patterns and how they change over time. This means fraud prevention techniques can become more accurate and sophisticated.

Sardine brought together Crypto, Fintech, and traditional finance industry participants at Money 2020 in Las Vegas. From here, Sardine will run a series of events to look at how we can change the industry’s profile.

The goal is to forever alter the industry's perception from one seen as fraught with scams, hacks, and fraud to a field that sets the standard in data-driven fraud prevention.

We’ll be running a dinner in London in January too, and if you’re interested in attending or just getting involved, contact us.

Fraud and Payments are two sides of the same coin with Blockchain.com & Sardine was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

TL;DR 👇

Crypto and DeFi have two major problems restricting their mainstream adoption.

1. The interface isn’t friendly, and the UX is often clunky and confusing.
2. The most common scams, hacks, and frauds occur at the gateway and on-ramps to crypto services.

Juno’s crypto-friendly banking platform allows users to manage cash and crypto with a single checking account. The Juno-Sardine partnership enhances the crypto banking experience for users with the least possible friction and the highest compliance and fraud prevention levels.

Meet the banking app of web3

Juno is banking meets Crypto. Juno users have an all-in-one checking account for direct deposits and a crypto wallet that supports multiple crypto assets. Users can choose to get paid in crypto or fiat and make payments in a currency of their choice (crypto or fiat). Currently, Juno serves over 75,000 crypto natives in the US.

The reality of crypto today is that the user experience is broken. Despite the robust tech, existing web3 solutions have horrible UX or have highly complex wallets and exchanges that are nowhere close to the app experience of a sleek and sophisticated fintech product. Another issue that most users face is the high incidences of scams, hacks, and fraud. The FTC estimated that consumers lost more than $1.4bn to scams in 2021, not counting giant hacks like Axie Infinity, Wormhole, or Beanstalk.

The trifecta of high-risk transactions is the gateway to open accounts, fund accounts, and withdraw from Crypto into Fiat. Juno is solving this by building an app that’s slick enough for everyday banking and meets the highest level of compliance — that’s why Sardine was the perfect partner.

Perhaps the most critical action for anyone operating a business is onboarding. Account creation has to be as smooth as possible to retain users.

While many fintech companies and crypto wallets perform Know your Customer (KYC) checks at onboarding, the focus should also be on account creation frauds to weed out risk.

Detecting & Preventing Account Creation Fraud

Fraud prevention by withholding account creation is a highly effective way to stop fraud before it occurs. Account creation in financial services is a regulated activity. Companies must obtain their customer’s details, including proof of identity, proof of address, etc before they can open their account.

However, identity documents can be stolen, and there have been several instances where a customer may register and still be involved in fraud (intentionally or scammed). If account creation is too rigid, the added friction could damage growth. Sardine’s account opening fraud prevention product has established a fine balance between the two to validate authentic identity for products like Juno.

Sardine collects documentation and validates it against various data sources such as SSN databases, telco, and known stolen identity databases. When a user is being onboarded, Sardine’s proprietary tech profiles users by tracking real-user signals and behaviors like:

• The behavior of a single device in our network: Sardine checks if one device has suspicious activity in the Sardine network of clients. If there are any instances of those activities, the chances of fraud are higher, and we can catch that before they sign-up.
• Keyboard usage: How information is entered can give away if may be using stolen details. Small things can make massive differences. Which keyboard shortcuts do you use, and how often do you use some keys vs. others? There’s a pattern to how good users behave and a consistent pattern to how bad users behave.
• Sign-up accuracy: If the user breezes through the sign-up process like an expert, they’re more likely to be fraudsters. These people are much more accurate than real users because they have signed up for 100s of accounts in the past. Even if they try to obfuscate that behavior, it shows.

Sardine has 1000s of signals, ready-made rules, and ML designed to ensure our customers like Juno can detect and prevent account creation fraud.

“We will withhold account creation if Sardine signals that this could be a fraudster.”

Ankit Pandey, PM at Juno

Account Funding Fraud

If an account is not receiving a monthly paycheck as a direct deposit, it will be funded in other ways. Often wallets will enable ACH or card funding. But this is also a critical touch point for fraud prevention.

There are numerous signals Sardine uses to identify account funding fraud:

• Checking the source of funds against blocklists: E.g., Is this funding being done from a known stolen card or compromised bank account?
• Checking user details during wallet funding. Your friend would rarely use their bank account to fund your Crypto wallet. It may happen, but it’s suspicious.

We add this and more signals to the 1000s of devices and trace behavior signals at account creation to ensure nothing strange is happening to an otherwise good account.

Account funding can be frustrating for many customers who must wait 2 days before they can transfer funds from their primary checking account into Juno via ACH. But Sardine created a fast lane for the lowest-risk users. Customers with the lowest risk of fraud can get their funds sooner to buy or withdraw crypto instantly.

It’s crazy that in 2022, most banks and fintech companies do KYC almost instantly, but loading funds takes several days.

Crypto Withdrawal Fraud and AML compliance

Withdrawing Crypto is a critical risk point for any business operating at the intersection of Crypto and Fiat rails. In the past year, giant hacks by state-sponsored actors (like Axie Infinity) have drawn significant attention from regulators, including sanctioning the Tornado Cash service. Regulated businesses must ensure any withdrawal is compliant with AML regulations and minimizes the risk of scams, hacks, and fraud.

Sardine is one of the few “all-in-one” platforms that can seamlessly mix on-chain and off-chain data to ensure compliance and reduce fraud. Here’s how Sardine does it for Juno:

• Ensure AML compliance. Crypto wallets are increasingly being added to sanction lists like OFAC, and it is critical businesses like Juno do not allow the off-ramping of funds from these wallets.
• Identify wallets associated with scams and hacks. Crypto forensics can identify suspicious activity on-chain and ensure those wallets are blocked from connecting to the financial system.

We’re still exploring the potential to mix on-chain and off-chain data, and we’re excited about what it could lead to.

“It is critical to be AML compliant when withdrawing from Crypto to Fiat, and Sardine’s mix of on-chain and off-chain data helps us manage that.”

Siddharth Verma, COO, and co-founder, Juno

Making web3 simpler and safer

Many who navigate the web3 space find themselves juggling accounts, wallets, and 16-digit passphrases, but there are no platforms that make this all-encompassing with the least friction. Juno’s crypto-friendly banking experience combines everyday banking with crypto to simplify and streamline a consumer’s financial life. And this needs the highest level of compliance possible, and Sardine was the best partner to do this.

If you’re curious about how we make onboarding, funding, and withdrawals safer and simpler, why not contact us?

The safest way into web3 with Juno and Sardine was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

As posted on the MetaMask help pages:

MetaMask now enables instant bank funding for U.S. customers to purchase crypto through ACH settlement merchant Sardine.

How does it work?

With Sardine’s new ACH integration, you can buy crypto instantly without settling delays.

Instant ACH allows orders to complete in minutes instead of days like a standard ACH order and works on holidays, unlike regular ACH.

ACH can be preferable to cards for some users, according to Sardine, because:

1. Instant ACH is more likely to work as paying with cards may be declined in 50% of purchases.
2. Instant ACH allows higher limits than cards.

Buy Crypto Using Instant Bank-To-Crypto Funding With Sardine in MetaMask

To fund your wallet directly through this method, simply choose “Instant Bank Transfer” after selecting the BUY button in your home screen.

Sardine’s payment system helps combat fraud and allows instant purchases of up to $3,000/day, $5,000/week, and $25,000/month for over 30 tokens.

How do I get started?

You will be prompted to sign up and go through the KYC process directly with Sardine.

To fund your wallet with instant ACH bank transfer:

1. Click “BUY” on the home screen to get started
2. Select your state (Sardine supports 48 states currently. Hawaii and New York will be supported in the future)
3. Choose “Instant Bank Transfer” as your payment method
4. Select the token and network you want to purchase on (example: ETH on Ethereum)
5. Enter the amount you want to buy (example: $500 of ETH)
6. Select “Sardine” as your provider. Note: If this is your first time using Sardine, you will be prompted to sign up directly with them.
7. Review purchase and click “Confirm”

Done. Sardine’s ACH-to-crypto purchase allows you to enjoy your funds instantly without waiting for days. Curious about NFTs? DeFi? Start diving in.

Instant ACH can be a game changer for web3.

Most wallet funding has historically been with cards or Apple Pay, but at Sardine, we saw cards and X-Pays have decline rates of 50% on average. That means first-time users have a 1 in 2 chance of not completing a purchase. This can lead to them abandoning their wallet and trying another, contributing to the idea that “web3 has terrible UX.”

With Sardine, users can pay directly from their bank account and instantly receive the Crypto or NFT. Sardine can also increase the average daily funding for users, who may be capped at between $300 to $500 in card payments, to at least $3,000 per day.

If you’re curious about why ACH is a good option for web3 and want to learn more, check out our deep dive here.

More coming soon.

Sardine is now available as a payment option for Brave, Autograph, and MetaMask.

We’ll add more payment options and geographies in the coming months and always with the industry’s highest conversion rates and best fraud prevention performance.

Want higher conversion, higher limits, and less fraud?

With Sardine, you can.

Contact us to learn more.

Sardine delivers Instant Bank ACH for MetaMask users in the US was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.

NFTs are here to stay, but users and NFT creators often suffer from poor onboarding, UX, and payment options. This creates missed opportunities to buy a unique item for buyers and for sellers, a loss of conversion, and monetization for dApps.

Magic and Sardine have partnered to overcome both of these issues to improve conversion rates. Combining Magic’s rapid and secure onboarding with the instant account funding of Sardine’s NFT checkout.

Collectors can create a wallet and buy an NFT instantly. Merchants can get near 98% conversion rates, and the security that Sardine will reduce fraud.

NFTs are here to stay.

Non Fungible Tokens (NFTs) continue to succeed with brands and creators, even after the 2021 bubble burst. In the first six months of 2022, brands like Nike, Adidas, and Tiffany collectively generated over $1.3bn in NFT revenue (with more than 50% of Nike revenue being secondary sales). NFT marketplaces generate an average of $16m in revenue per day for independent creators and NFT collections.

Decentralized Finance wallets (or DeFi wallets) are critical to the success of NFTs. Users collect NFTs and can take advantage of the unique properties of DeFi wallets, like interacting with 3rd party games, apps, or marketplaces.

But brands creating NFTs still struggle with Crypto’s UX problem.

The standard wallet security model is confusing for new users.

Often, just creating a web3 wallet is a test many users fail to pass, and if they do, to secure their account now, they have to manage a 16-word secure passphrase. Not only is this complicated, but it also involves several steps unfamiliar to users who often just want to buy an NFT immediately.

Time speeds up during an NFT drop as users fight to secure a rare, unique NFT, and in this scramble, every second counts when trying to secure an exclusive piece. If the user is battling wallet registration or security, they may lose the opportunity they had waited for.

Often NFT drops don’t happen on a marketplace or site where a user may already have credentials and login, but on a brand or creates own launch site. Users must connect and manage their wallets at the launch site to the NFTs contract. This can create delays, especially if a user doesn’t have a compatible wallet (e.g., if the NFT is on a chain that the user’s wallet does not support).

Brands and NFT merchants can’t afford delays and poor user experiences that can damage the community and create a high abandonment rate.

Magic has an alternative to instantly create secure wallets.

Magic help customers enable seamless NFT purchases by instantly creating user wallets without passwords or seed phrases. Users can leverage their existing credentials (e.g., Email, SMS, or Social Login in Web2 or web3 wallet if they have one) to quickly get in on an NFT drop. Magic works regardless of chain, so users do not have to create a new wallet to participate. Magic also supports large-scale drop events such as Matrix and Discovery Channel Shark Week on Nifty’s.

For brands and creators, this means the NFT drop is available to more users, and their chances of a collection selling out rapidly and gaining community momentum and excitement increase.

But there’s another requirement for a smooth NFT drop.

Don’t let unfunded wallets create delays.

Higher conversion also requires well-funded wallets. But if a user has never used that wallet before or is new to a particular chain, how can they quickly fund a new wallet?

Traditional on-ramps into NFT wallets may involve a consumer buying a compatible Crypto asset at their exchange, then sending it to their new wallet. Depending on the network, this can take minutes to hours during high congestion.

Some NFT brands and creators direct on-ramps into major wallets, but often these rely on debit card or bank account funding which has a low spending limit and a high chance of being declined. This is because, unfortunately, the risk of fraud when funding a brand new Crypto wallet for NFT purchases is extremely high.

Users want their NFT now but have a 50+% chance of being declined and may be limited to a maximum of $500, meaning they miss out on the rarest NFT.

Sardine instant settlement works via bank transfer or card, with higher approval rates and higher limits.

That means more customers and more NFT sales when customers want them.

Sardine’s instant NFT checkout has supported clients like Autograph during their exclusive Tom Brady drop and allowed users to instantly fund their wallets with higher limits and approval rates.

For users, this means instead of being frustrated by declines when trying to fund the wallet; they get the NFT they want. NFT issuers can improve their approval rates to 90+% (and in many cases 98%+), building on Sardine’s unique fraud prevention and instant funding expertise. Sardine can also provide much higher limits, allowing users to buy more exclusive and limited edition NFTs from a collection.

You can streamline your onboarding and wallet funding today with Magic and Sardine.

Click here to learn more.

Faster onboarding and higher conversion with Magic and Sardine was originally published in Sardine on Medium, where people are continuing the conversation by highlighting and responding to this story.