Tuesday, November 29, 2022
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HomeLaw and OrderCybercrimeUnit21 Launches FinTech Fraud DAO To Combat Cybercrime!

Unit21 Launches FinTech Fraud DAO To Combat Cybercrime!


Unit21 (website) and other U.S. consumer fintech community members have joined forces to launch the Fintech Fraud Decentralized Autonomous Organization (DAO). Participating fintechs include Brex, Chime, PrimeTrust, Yotta, and Airbase. This decentralized network uses a collaborative approach to data sharing to detect and combat fraud. The DAO is expected to process data from 20% of all U.S. fintech customers to help the industry transition from fraud detection to fraud prevention.

The DAO allows participating organizations to access aggregated user data through an open-source platform, enabling greater transparency and faster identification of suspicious and potentially fraudulent activity. Traditional AML and KYC systems have not allowed data sharing between organizations to the extent required, making it challenging to share critical fraud prevention information. Fraud losses have always been a high cost for financial institutions, especially in the fintech sector, where fraud attack vectors constantly evolve.

For each participant, the Fintech Fraud DAO connects the risk and compliance infrastructure to their end-user data by enabling participants to privately and securely contribute anonymized transaction behavior. In turn, they gain access to cross-platform, aggregated customer data. Each participating fintech has decision-making power over the DAO through distributing governance tokens in the DAO network. The system operates as a pure give-to-have model, granting access to all U.S. fintechs willing to provide end-user data in a secure, encrypted format.

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