Why governments need to treat fraud like cyberwarfare, not accounting

Background

Fraud has long been perceived as a cost of doing business, a nuisance to be absorbed by banks and consumers.
This perception is outdated, as modern fraud blends geopolitics with advanced technical tactics, carried out through criminal proxies to target businesses and the public.

The global response to fraud has remained piecemeal, reactive, and inadequate, despite it being a global security threat.
Industrialized fraud integrates aspects of asymmetric and economic warfare, inflicting large-scale financial and societal harm while evading conventional defenses.
Fraudsters leverage global, industrial-grade tools like bot farms, malware, and cryptocurrencies alongside social engineering tactics.
Fraud networks exploit the gap between a borderless digital world and laws within national borders, allowing malicious actors to operate with impunity.
Criminals see jurisdictional arbitrage, siloed defenses, and slow cross-border processes as opportunities to carry out their activities.

Fraud subsidizes transnational organized crime and rogue states, undermining the integrity of the global financial system.
Cartels and hostile states increasingly rely on scams and insider fraud networks to supplement their core business models and evade sanctions.
North Korea weaponizes cyber-enabled fraud networks to circumvent sanctions and generate revenue, causing significant economic harm.
Global syndicates partner with militias and corrupt elites to funnel proceeds from victims who are invested emotionally and financially.

Fraud estimates range from $500 billion to over $1 trillion, with the costs extending well beyond stolen funds.
The same infrastructure that runs romance scams is used for sextortion, drug distribution, human trafficking, and weapons proliferation.
Generative AI supercharges fraud, with deepfakes, synthetic identities, and automated phishing dramatically cutting costs and making attacks far easier to scale.
Platforms like Telegram host bazaars for malware, deepfake services, scam websites, and bulk-purchased SIM cards, providing a multi-tiered infrastructure of deceit.

Criminals exploit the fragmentation between cybersecurity, telecommunications, technology platforms, and the financial sector, creating blind spots.
Jurisdictional arbitrage, siloed defenses, and slow cross-border processes allow malicious actors to operate with impunity.
When victims can't get meaningful recourse, confidence in the financial system erodes, and when businesses absorb mounting losses, investment falters.
When governments appear powerless, democratic legitimacy suffers.

https://cyberscoop.com/industrialized-fraud-global-security-threat-international-task-force-op-ed/
https://x.com/StopMalvertisin/status/2008516459702489352
https://www.linkedin.com/posts/mateoportelli_why-governments-need-to-treat-fraud-like-activity-7414433085829697537-V1Un
https://www.socdefenders.ai/item/b6ab9006-d400-426d-90f4-12f34a6ba7f6