Fraud Prevention Requires Creative & Analytical Thinking To Stay Two Steps Ahead – Nimrod Lehavi


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@Ishan PandeyIshan Pandey

Student of law working on code and everything law.
Founder: Blockchain Research

Preventing fraudulent transactions online is a cumbersome process for all the parties involved. With the digital payment ecosystem expanding each year, new technologies and companies develop innovative ways to detect fraudulent transactions in real-time. In an online ecosystem where trust between the parties is deficient – new-age technologies are waiting to disrupt the ecosystem. Artificial intelligence-based training algorithms are successfully flagging and resolving fraudulent transactions in real-time. I sat down with Nimrod Lehavi, Co-founder and CEO at Simplex, to discuss how new-age technologies are changing the digital payments ecosystem.


Ishan Pandey: Hi Nimrod, welcome to our “Behind the Startup” series. Tell us about yourself and the story behind Simplex?

Nimrod Lehavi: I began my entrepreneurial career in the 90’s as a self-taught software developer. I’m a hacker at my core and I enjoy finding solutions to new and challenging problems. After 15 years of running my own software development business, solving complex business problems for many companies in various sizes and verticals, I stumbled upon The Bitcoin Whitepaper (the manifesto of Bitcoin, for any readers not familiar) and was charmed by it. No solution existed that allowed me to buy bitcoin with my credit card, and in general, it was constrained. I knew I wanted to do something new in this exciting young ecosystem, So I decided to make bitcoin accessible, in 2014 Simplex was born. Today I lead over a hundred of Simplex employees throughout the world as we work alongside our vast partner network to drive enablement and advance the ecosystem, helping anyone, anywhere, securely on-ramp, anyway.

Ishan Pandey: How is fraud prevention different in crypto compared to processing payments for traditional credit card companies?

Nimrod Lehavi: Fraud prevention differs between verticals, but it’s incredibly complex when it comes to crypto. The crypto space is unique in being truly global, 24/7/365 and that many who fall prey to fraud don’t even know it. It’s as much about identifying that users are aware of what they’re doing as it is weeding out real fraudsters. Fraud prevention warrants a lot of creative and analytical thinking always to stay two steps ahead of scammers, and it’s incredibly dynamic. We leverage a combination of skilled analysts and AI to detect all types of fraud at their earliest stages and annihilate them.

Ishan Pandey: For new users, on-ramping is a confusing and complicated process. How is crypto on-ramping being democratized?


Nimrod Lehavi: Excellent question. Crypto on-ramping has not traditionally been easy and I believe that the simpler we can make the process of on-ramping, the more the ecosystem will grow. On-ramping has been making steps toward democratization since we first pioneered methods for entering the ecosystem using credit or debit cards. We’ve now gone beyond credit or debit cards to enable uniquely large and flexible purchases across our partner network with our Banking solution. Leveraging Simplex Banking, our partners can allow users to on-ramp with any fiat anywhere globally, making giant leaps towards mass crypto adoption.

Ishan Pandey: What problems do you see that still need to be tackled when it comes to Cryptocurrency On-Ramps and Off-Ramps?

Nimrod Lehavi: Given the recent Bitcoin Boom, more users will be looking for a seamless way to off-ramp using rails that they are already comfortable with. The knowledge that it is just as easy to off-ramp, or utilize crypto earnings, as it is to on-ramp has been proven to increase the number of on-ramps in a given exchange. As a community, we need to continue working to ensure that crypto funds are easily accessible to the mass market. 


Ishan Pandey: Fraud prevention and management is a massive problem for exchanges, brokers, wallets, etc. What technologies and protocols are you deploying for preventing fraudulent transactions?

Nimrod Lehavi: We are always vigilant to new fraud trends and strategies to protect our partners and their users. As fraud is an incredibly dynamic threat, we are continually expanding our fraud prevention technologies and protocols. An example of a protocol we employ is identifying user patterns and building a user story to see if the patterns of behaviour fit the user profile. By triangulating data and leveraging both advanced AI and seasoned analysts, we can build a profile of each user to make a timely, yet informed, judgment call, protecting our users and partners from fraud.


Ishan Pandey: What new fraudulent and sophisticated techniques are you seeing being deployed by scammers?

Nimrod Lehavi: Unfortunately, the panic surrounding COVID-19 launched a wave of fraud schemes. For example, some scammers encouraged the transfer of crypto funds in exchange for the sale of masks (which they never received), others included fraudulent CDC emails that facilitated the transfer of funds to invest in a COVID cure, among others. Ponzi schemes involving cryptocurrency amounted to billions last year, and scammers are moving beyond email to use social media platforms, such as YouTube, Instagram, and Facebook, to promote their scams. When faced with an email or request, I encourage users to always look into a company before working with it and do their due diligence to make sure they are familiar with crypto concepts and what is being asked of them.

Ishan Pandey: What advice would you give to a startup that wants to put measures for fraud detection and prevention in place?

Nimrod Lehavi: It’s essential to have a well-prepared and trained team who are well-versed in all there is to know about fraud types and prevention. It’s also crucial to have up-to-date and sophisticated protective measures and checks in place to ensure that you are always one step ahead of the scammers. But what makes the difference is developing a profound understanding of your market, and putting yourselves in the shoes of the other side, trying to “think like the bad guys” and preempt the scams before they occur.

Ishan Pandey: Do you think that being based in Israel, which is a global leader in cybersecurity, gives you a competitive edge as compared to others?


Nimrod Lehavi: Being based in Israel is part of our DNA. As a company born out of the need to make crypto accessible, that mission continues to underscore and lead the company. In true, StartUp Nation fashion, we pride ourselves on being a talented and passionate group that works together to create unique solutions for difficult problems. Our team comes with a vast background in cybersecurity, finance, and defence, and brings years of quick and decisive problem-solving to join together and create something meaningful. However, the diversity of our team and values of problem-solving are not limited to our Israel office, and this culture permeates throughout our office in Europe as well.

Ishan Pandey: What technology and trends are you looking at, which can disrupt our society?

Nimrod Lehavi: I believe crypto has a lot to offer to the world: a lasting impact on our financial systems hence on society, a real change in the infrastructure of the economy and financial services. Our goal always has and will always be to democratize crypto accessibility and adoption for everyone.

I see the crypto ecosystem as a potential alternative financial ecosystem; fast, innovative, secure, and transparent. If indeed globally accessible, think about how that can impact the world. No matter the regime one may find themself in, they will be able to take hold of their finances and not be subject to others’ whims. From our Banking solution, all of our products to our Principal Membership with Visa are geared to enable our partners to offer anyone, anywhere access to purchase, anyway. As we enter into 2021, we will be focusing our efforts on making crypto even more accessible to anyone, anywhere, throughout our trusted partner network.

The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Interviewer – Ishan Pandey.



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