Grow Revenue by Making Cryptocurrency Transactions Safe, Compliant and Knowable

The CipherTrace anti-money laundering solution helps exchanges grow revenue by safely engaging in cryptocurrency transactions while maintaining a low risk profile. It helps cryptocurrency businesses easily and economically comply with AML regulations around the globe. The platform has a high-speed API as well as a visual interface that can store case history, export data, and facilitate bulk analysis. For regulators and auditors, the solution provides an easy-to-use forensics environment that allows non-technical users to search addresses, dive deep into related transactions and analyze large numbers of transactions.

According to the UN Office on Drugs and Crime, money laundering may amount to as much as 5% of global GDP, or $2 trillion.

Anti Money Laundering for Financial Services

  • Cryptocurrency exchanges
  • Initial Coin Offerings (ICO)
  • Cryptocurrency hedge funds
  • Banks, brokerage, and credit unions
  • Money transmitters
  • Auditors and lawyers
  • Regulators
  • Law enforcement

Superior Attribution Gives an Accurate View of Risk

Bitcoin transactions are not entirely anonymous. Most cryptocurrencies are in fact pseudo-anonymous and the details of the numbered transactions are a matter of permanent public record. However, identifying risky attributes of the entities participating and location of transactions requires additional intelligence. CipherTrace offers a broad, high-resolution view of the cryptocurrency transaction landscape, and uses this to provide actionable intelligence for AML investigation and compliance. CipherTrace leverages machine learning algorithms to cluster data points and integrates both open and closed-source intelligence. As a result, CipherTrace can rapidly aggregate and correlate a variety of indicators, and then provide users with active attribution. This capability also helps investigators gather evidence more quickly.

Algorithms Calculate Risks Levels

Advanced CypherTrace algorithms calculate risks levels based on associating suspicious addresses. CipherTrace also profiles hundreds of global exchanges, ATMs, mixers, money laundering systems, gambling services and known criminal addresses to score transactions and asses risk. It then assigns risk levels to transactions based on activity related to suspicious addresses and wallets.

Types of Suspicious Addresses
Types of Suspicious Addresses

CipherTrace intelligence identifies and scores a variety of AML risks —

  • Criminal Activity
  • Dark Markets
  • Money Laundering and Mixing Services
  • Stolen Cryptocurrencies
  • Terrorist Financing
  • Gambling Services
  • Ransomware
  • Investment Scams

Automated Risk Scoring Risk Profiling Speeds AML Compliance

CipherTrace has developed a simple-yet-powerful Application Programming Interface (API), which delivers real-time assessments of cryptocurrency transaction risk. This interface can be rapidly integrated with existing compliance infrastructure. The high-performance API quickly returns actionable risk scores for each transaction. Transmitters can then make decisions on whether to investigate a customer for violations of their AML policy or local regulations. The API can automatically produce a deeper level of analysis to provide the level of detail required by regulators, including FinCEN, for Suspicious Activity Reports (SARs).

Alternatively, users can query individual cryptocurrency transactions simply by entering the address in the easy-to-use CipherTrace Crypto Search Engine.

Transaction risk score
Transaction risk score sample levels

The CipherTrace API rapidly returns a risk score for a submitted address, which investigators can then use to build a risk profile.

Investigate Potential Risks More Deeply

The environment’s interactive user interface allows non-technical users to perform a deeper investigation and visually trace cryptocurrency tracing addresses and customers. For compliance officers, this capability can ensure customers do not put the organization in danger of AML non-compliance or of handling stolen funds.

Interact with Live Graph Database to See Relationships

CipherTrace Active Attribution also allows users to take advantage of live interactions with a powerful graph database to trace the flow of funds over time and through the bitcoin ecosystem. A graph database visually displays data with relationships to the main data item, which in this case is a specific bitcoin transaction or wallet. This capability is important because attributing cryptocurrency transactions to specific entities requires looking at related data to essentially create a composite photo of the suspect transaction. CipherTrace enables users to step backward and forwards through the transaction history to discover if the funds have been tainted. Smaller organizations and knowledgeable users can use this interactive graph view to vet new customers.

Tracing Transaction Flow
Tracing Transaction Flow

Interactive Graph Database helps investigators to identify and visualize related transactions

Benefits

  • Comply with AML regulations
  • Detect customer transactions with dark markets
  • Discover if stolen cryptocurrency is being traded through your services
  • Identify risky customers through an automated risk scoring API
  • Inform suspicious activity reports (SARs)
  • Export data for Currency Transaction Reports (CTRs)
  • An intuitive user interface to perform deeper inspection of risky customer transactions.
  • Bulk import of transactions and wallets for analysis.

The decentralized, pseudo-anonymous nature of bitcoin makes it and other cryptocurrencies attractive to criminals and terror groups seeking to conceal the movement of funds. Consequently, law enforcement, financial regulators and various arms of governments have taken a keen interest in blockchain-based transactions. Compliance officers at cryptocurrency exchanges and other crypto businesses must also contend with the very complex task of complying with a growing number of Anti-Money Laundering (AML) regulations. The platform also provides a state-of-the-art forensics environment for investigators in a number of fields.

Regulators around the globe continue to rank AML as a top concern, which also helps to explain the growing regulation of cryptocurrency exchanges. In addition, recent actions by the Financial Crimes Enforcement Network (FinCEN) mean financial institutions—including cryptocurrency exchanges, hedge funds, money transfer agents and custodial banks—must also comply with U.S. AML regulations or face stiff penalties. This puts tremendous cost and human resource burdens on money services businesses. The SEC has also made it clear that it intends to regulate Initial Coin Offerings (ICOs) to protect consumers.

The CipherTrace Cryptocurrency anti money laundering Solution delivers transaction risk scoring and reporting necessary to comply with AML regulation.