Bitcoin Anti-Money Laundering and Risk Scoring Solutions

Bitcoin AML

CipherTrace helps bitcoin money transmitters and virtual currency businesses to safely engage in bitcoin transactions and comply with anti-money laundering (AML) regulations. The Financial Crimes Enforcement Network, FinCEN, recent actions sent a clear signal to bitcoin money exchangers operating in the US, including exchanges, hedge funds, money transfer agents and custodial banks, that they must comply with US AML regulations or face significant penalties. CipherTrace helps enable compliance by scoring the risk of incoming and outgoing bitcoin transactions so money service businesses (MSBs) can rest assured that they are not exposed.

CipherTrace delivers actionable risk scores for each transaction so transmitters can make decisions on whether to investigate customer violations of their AML policy or local regulations. A comprehensive investigative user interface then allows you to perform a deeper investigation on identified bitcoin addresses and customers. With these tools, you can ensure that your customers do not endanger your compliance with regulations and that you are not handling stolen funds.

Anti-Money Laundering Compliance Score API

The CipherTrace AML solution features a high-performance Application Programming Interface (API) which allows customers to query bitcoin address for compliance and risk.

The API returns a risk score for a submitted address. This risk score is used to build a risk profile.   Example risk scores are:

Augmented Cryptocurrency Intelligence

Bitcoin, Ethereum and other cryptocurrencies are pseudo-anonymous and transaction data is public but not useful for providing actionable AML information. This open source data alone has little context and must be augmented with additional data to draw meaningful AML conclusions and compliance.

CipherTrace offers a broad, high-resolution view of the blockchain transaction landscape, and uses this to provide actionable intelligence for AML compliance.

Active Attribution

Identifying who is behind a transaction is complex but not impossible. A single data point is not definitive evidence. CipherTrace uses machine learning algorithms, cluster data points and integrates both open and closed-source intelligence. CipherTrace is able to create AML risk scores by aggregating and correlating a variety of indicators.

 

Powerful and Easy to Use

CipherTrace offers state of the art investigation tools for technical and non-technical users once an address or wallet has been identified by the API as high risk or non-compliant. Individual users start analyzing with familiar, easy to use search form to access the underlying power of the CipherTrace data.

Compared to the other two or three solutions available in the market, CipherTrace customers love the powerful, interactive and easy-to-use AML investigative interface.

Figure 1: Simple Search

CipherTrace Identifies and Scores the Risk from Transactions that Involve:

  • Dark Markets
  • Money Laundering and Mixing Services
  • Stolen bitcoins
  • Terrorist Financing
  • Ransomware
  • Child Exploitation
  • Terrorist Financing
  • Drug Transactions
  • Investment Scams

Sophisticated users can take advantage of live interaction with the graph database to follow the flow of funds over time and through the bitcoin ecosystem.

Figure 2: Interactive Graph Database of Identified Transactions

For anti-money laundering (AML) and know-your-customer (KYC) regulation enforcement, we support bulk import of transaction data and provide ongoing analysis of bitcoin movements.

CipherTrace profiles hundreds of global exchanges, ATM’s, mixers, money laundering systems, and known criminals to score transaction and address risk.

Figure 4: Profiles Types of Risky Addresses

CipherTrace’s AML APIs are ideal for customers that require large-scale transaction analysis. Smaller customers such as cryptocurrency hedge funds can choose to use the interactive interface to vet new customers.

Benefits

  • Comply with AML regulations
  • Detect customer transactions with dark markets
  • Discover if stolen bitcoins are being traded through your services
  • Identify risky customers through an automated risk scoring API
  • Informs suspicious activity reports (SARs)
  • Exports data for Currency Transaction Reports (CTRs)
  • An intuitive user interface to perform deeper inspection of risky customer transactions.