Cryptocurrency and credit card fraud: Q&A with n.exchange | Invezz

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n.exchange is a cryptocurrency exchange specializing in fiat on- and off-ramp to make crypto investment user-friendly.

Their current campaign to combat credit card fraud in cryptocurrency highlights a significant rise in fraudulent purchase attempts by cyber criminals using stolen card details, most of which was perpetrated from countries in the Western hemisphere.


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Invezz talked with Gustavo De La Torre, Director of Business Development at n.exchange to better understand the firm’s recent findings.

You report that Canada was one of the top three locations for crypto purchase credit card fraud amid a fraudulent activity spike between 2020 and 2021. What do you believe the reasons for this are?

Cryptocurrency is gaining interest in Canada, so naturally this opens a new avenue for scammers to take advantage of. In addition to growing interest, there is a lack of knowledge of cryptocurrency, which allows scammers to fraud of individuals that are accustomed to only fiat currency. Statistically, Canada ranks as one of the higher targets for fraud attempts in general, with Statista finding in 2018 that Canada was the third highest country for consumers reporting being targeted for fraud. Another interesting statistic from Simple Rate named in its January 2021 report showed Canadians reported a 71 percent increase in the “number of accounts who have reported at least one case of credit card fraud.”

Few platforms involved in crypto have made combating credit card fraud in cryptocurrency a main goal like you, which is commendable. What motivated you to focus on this?

One of n.exchange’s primary goals is bridging new users into crypto. Being aware of this unexplored world many new users can find themselves in, there is a sense of duty and responsibility to inform them of the possible scenarios they may encounter with scammers/fraudsters. And it’s critical to us that they feel comfortable and secure using our platforms and our partners’ platforms because we also believe the future of cryptocurrency is grounded in a positive and secure user experience.

How can the average user protect themselves from credit card fraud in crypto?

The obvious answer is to say that we recommend being careful with credit card information everywhere and only use services that are reputable and regulated, which assures that your private information will not be sold/shared. But most importantly, educate yourself. 

For someone new to the game, it can be quite easy to fall for phishing scams that appear to be legitimate crypto exchange operations. Familiarizing oneself with the industry is the priority. Read about reputable, safe exchanges; ask friends and family who have invested or bought crypto. Learn to recognize the signs right away. If something looks unfamiliar, don’t explore it immediately.

n.exchange is currently in the process of seeking financial regulation documents from the SEC. Are you optimistic about this prospect and about future interaction with the watchdog in general?

Definitely, we are very optimistic about our journey and the upcoming application with the FCA. One of our priorities at n.exchange is transparency, which is supposed to be the basis of blockchain technology and the origins of the crypto world. Because we want to be transparent, we are looking forward to our relations with these oversight agencies. We understand how valuable they are for consumers and the legitimization of crypto.

What does the future of crypto regulation look like in your opinion? 

There is a high probability that KYC becomes requisite for crypto transactions in the future on any platform. Thankfully blockchain technology is built on the principle of systemic transparency, so basic customer transaction information should be easy to obtain from an exchange, assuming no illicit activity is being actively perpetrated on their part.

Beyond KYC, it’s difficult to discern where this can go, especially since digital assets are difficult to put into a box and define very clearly. In the U.S., we saw Congress take a stab at it with the latest infrastructure bill, which left many concerned by the bill’s characterization of who is obligated to report to federal agencies on what crypto holders own, for example. Moving forward, as government officials come to understand crypto better and the markets, they will eventually come up with regulations that will be reasonable for everyone.

What are the pluses and minuses of stricter regulation of the crypto, DeFi, and NFT markets?   

I would break it down as follows. There are two clear positive points: 

a) Showing that crypto can easily be adopted by the masses in a secure fashion.

b) One step closer to bitcoin becoming a globally-adopted currency.

The two clear negative points:

a) Brings an obvious element of centralization to what was meant to be a truly decentralized financial system, which goes against the nature of crypto as originally intended.

b) Defying the P2P concept of cryptocurrency, which users may not want in the end.

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