The Crypto / Web3 / Decentralized Finance (DeFi) industry presents a uniquely challenging security landscape, defined by the irreversibility of transactions, which means losses are instant and unrecoverable once assets are moved to a fraudulent wallet. The primary threats are highly evolved and diverse, encompassing large-scale Account Takeover (ATO) of exchange accounts and wallets, Account opening fraud utilizing sophisticated synthetic identities, and complex on-chain manipulations like Wash trading & artificial volume manipulation on NFT platforms. A core difficulty is that Attackers use VPNs, TOR, and cross-chain hopping to evade jurisdictional and traditional security controls, while Wallet-draining phishing attacks and malicious smart-contract approvals happen daily, resulting in massive user losses.

This paper introduces the CrossClassify solution, an AI-powered, real-time crypto fraud prevention stack that offers a holistic defense by combining continuous identity, device, and behavioral monitoring with specialized Cross-chain Link Analysis. Our approach utilizes Device Fingerprinting to block device farming used for synthetic accounts and airdrop abuse, and Continuous Behavioral Biometrics to instantly detect deviations in wallet interaction patterns and transaction confirmations. By employing Graph-based Link Analysis, CrossClassify effectively identifies wash trading rings, crypto mule-wallet networks, and malicious collusion that purely on-chain analytics often miss.

The key result and main motto of CrossClassify is "Real-Time Fraud Detection for Apps", which, in the crypto domain, is realized through a system that continuously scores every login, withdrawal, token swap, bridge transfer, and API request in real time. This provides evidence-backed risk scores, enabling the platform to deploy Adaptive risk scoring to introduce friction only when needed (e.g., high-risk withdrawal attempts), thereby safeguarding assets while maintaining the competitive low-friction experience demanded by Web3 users. This technical white paper is essential reading for key security and compliance leaders, including Crypto exchange operators, Web3 wallet providers, DeFi & CeFi founders, and Risk, security and fraud prevention engineers, who are tasked with securing their platforms against systemic on-chain and off-chain financial crime.