CipherTrace Introduces Cryptocurrency Real-Time Predictive Risk Scoring to Mitigate Money Laundering of Crypto from Theft and Ransomware Attacks
Exchanges and other Virtual Asset Service Providers using CipherTrace’s transaction monitoring can now predict the risk of a bitcoin transaction before it is committed to the blockchain; this protects customers who have had cryptocurrencies that were stolen and those that face ransomware threats
MENLO PARK, CALIF. JULY 21, 2020
CipherTrace announces cryptocurrency real-time transaction risk scoring with the addition of predictive capabilities to help exchanges, ATMs, OTC desks, hedge funds, custody solutions, payment processors, and financial investigators to ensure compliance with Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF), and sanctions requirements. This capability is now available to select CipherTrace customers, including law enforcement investigating the Twitter hacking case, and will be generally available to the entire customer base as of July 31st.
Real-time analytics and predictive risk scoring for cryptocurrencies enables exchanges and other Virtual Asset Service Providers (VASPs) to be able to score transactions from low to high risk based on whether the funds have been tainted by traveling through illicit paths or associated with known bad actors or sanctioned geographies. CipherTrace implements this foresight without sacrificing user privacy, as the software does not process any personally identifiable information.
What does Real-Time Predictive Risk Scoring Do?
Predictive and real-time analysis of cryptocurrencies—now a trillion-dollar market—allows a safer environment for the world’s transactions. Being able to perform predictive analysis allows customers to see and protect stolen funds, freeze those funds, stop ransomware launderers, and protect customers from fraud. It also allows law enforcement agencies to take action immediately to protect investors, operators, and consumers.
How Does Real-Time Predictive Risk Scoring Work?
Before a bitcoin transaction is confirmed on the blockchain, it is first created and broadcasted to the network. Then, it is stored in a mempool of other unconfirmed transactions until a miner validates it and adds it to the blockchain. At this point, the transaction is final. This process can take at least ten minutes and sometimes hours to complete and places exchanges and other custodial services in the awkward position of forcing customers to wait for their transactions to be confirmed so that they can perform necessary due-diligence on transaction risk.
“It is our goal to make cryptocurrency global and available for everyone, while protecting personal privacy,” said Dave Jevans, CEO of CipherTrace. “Cryptocurrency exchanges and other VASPs have regulatory obligations to address the risk of money laundering, terrorist financing, human trafficking, and weapons of mass destruction programs. The introduction of predictive risk scoring provides VASPs with a powerful new tool to identify potentially illicit funds before those transactions are finalized on the Bitcoin blockchain. This capability will also help VASPs offer an improved, more efficient user experience to their customers.”
VASPs utilizing CipherTrace’s monitoring suite will be able to freeze an account that is flagged as having a high probability of originating with stolen funds. By halting the movement of illicit funds, VASPs will deter future cryptocurrency crimes and help to change bitcoin’s lingering reputation created by its early use on the illegal Silk Road marketplace. Most VASPs are required to file suspicious activity reports whenever they receive funds likely to contain illicit origins, and CipherTrace’s predictive risk scoring capabilities will facilitate that process.
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CipherTrace, leading cryptocurrency intelligence company, protects financial institutions from crypto laundering risk and is helping to grow the crypto economy by making virtual assets trusted by governments and safe for mass adoption. CipherTrace delivers the world’s most comprehensive cryptocurrency intelligence to detect money laundering, inform law enforcement investigations, and enable regulatory supervision. CipherTrace founders are dedicated to protecting consumer privacy, while defending against illicit finance. Deep expertise in cybersecurity, eCrime, payments, banking, encryption, and virtual currencies form the foundation for CipherTrace’s commercial offerings. For more information, visit http://www.CipherTrace.com or follow us on Twitter @CipherTrace.