The original title is: "Your Fraud Detection Cannot Tell a Legitimate Agent From a Bot. Identity Is the Only Fix."

Short summary

Traditional fraud detection fails for AI agent payments because legitimate agents and bots produce identical behavioral signals. Know Your Agent (KYA)—a cryptographic identity layer using DIDs and delegation credentials—solves this by verifying agent registration, authorization scope, and MiCA compliance, enabling fraud systems to allow verified agents while blocking actual attacks.

• •Traditional fraud rules (typing patterns, device fingerprints, biometrics) cannot distinguish legitimate AI agents from bot attacks, both of which move fast and show no human presence signals
• •Know Your Agent (KYA) framework uses cryptographic identity credentials and delegation proofs to answer three questions before settlement: Is the agent registered? Who authorized it? Is this transaction in scope?
• •Production example: system flagged 847 agent transactions as fraud with 95.9% false positive rate; KYA eliminates this by shifting from behavior-based to identity-based verification

Generated with AI, which can make mistakes.