Vogogo Cuts Fraud Mitigation Costs in Industry Awareness Bid

The recent $5m hack at leading bitcoin exchange Bitstamp may be evidence that fraud remains a pressing concern in the bitcoin business community.

However, according to Vogogo CSO Rodney Thompson, the industry has yet to make a concerted effort to embrace solutions that can help mitigate that risk, which he described as dire given its proven ability to sink bitcoin businesses.

He is hoping to add pressure that conversation, announcing that Vogogo will offer its fraud and risk management services as a standalone to all cryptocurrency businesses, and that it will waive the costs associated with the integration of the offering.

Speaking to CoinDesk, Thompson asserted that Vogogo is seeking to provide the offering at a reduced cost to help ensure the long-term health of the ecosystem, and by extension, the company’s current and future customer base.

He said:

“Unless more companies are willing to help different crypto-businesses set up and deal with crypto-transactions, too many of these businesses are going to be compromised. It’s important for Vogogo for this vertical to be very healthy. Our profits come on a per-transaction basis, but we need businesses in the crypto-industry to be able to transact.”

Thompson went on to attack the notion that bitcoin entrepreneurs can rely on the inherent security offered by bitcoin during the transaction process, citing the demonstrated abilities and resourcefulness of fraudsters.

“Sophisticated fraud will always be at your doorstep,” Thompson said. “If something happens, you have to be able to deal with it in real time while it’s happening.”

Vogogo customers will be able to use the company’s services for three months free of charge, and with no future obligation.

The announcement comes just months after Vogogo raised $8.5m in new funding last summer as part of an effort to bring its services to businesses outside of its home market of Canada.

Hands-on training

As part of the onboarding process, Thompson said that Vogogo will also teach cryptocurrency businesses how to use its fraud mitigation tools, which he said can deal with fraud in real time during the fiat-to-crypto transaction.

However, he stressed that unlike other solutions, Vogogo strives to make the information that its tools provide actionable.

“If someone makes a suspicious transaction, and does it two or three times, you’ll know you’re in the middle of a [fraud] ring. This isn’t about mailing us your utility bill, these are the things that are done in real time and that are automated,” he said.

He went on to frame these tools as necessary, given that single incidents can cost companies thousands of dollars at a time when many are still striving to reach wider audiences on limited budgets.

Crypto focus

Thompson also stressed that Vogogo's offering is unique in that its solutions are designed for the digital currency ecosystem regardless of the specific cryptocurrency being used.

As such, the CSO further described ongoing events in the industry – in bitcoin and beyond – as disappointing given that the tools to reduce fraud are already available.

“It’s also frustrating as we believe these types of sophisticated fraud events can be effectively prevented with the right systems in place,” he added.

Current Vogogo clients include CoinTrader, ANXPro, Rock Trading and more.

Fraud image via Shutterstock