Glossary Archive - Page 5 of 11 - CipherTrace

Custodial wallets are wallets where the private key is held by a third party (e.g., an exchange). Whoever controls the private key also controls the funds. When contracting with qualified and reputable custodians, custodial wallets can offer users increased security and formality over their assets. Custodial wallets may be more suitable for entry level users…

A Dark Market is a commercial website that operates via darknets such as Tor or I2P. They function primarily as black markets, selling or brokering transactions. Dark Markets include crypto addresses associated with individuals and organizations who sell or traffic human beings, illicit arms, counterfeit currency, forged documents, illegal narcotic drugs and psychotropic substances, unlicensed…

Dash is an open source altcoin that was created from a fork in the Bitcoin Protocol. Dash was formerly known as Xcoin and Darkcoin, but rebranded itself as Dash (a portmanteau of “digital cash”) in 2015 after Darkcoin become associated with its prevalence amongst dark marketplaces. Dash runs on a proof of work consensus model,…

A Decentralized Exchange or DEX is a type of cryptocurrency exchange that operates in a decentralized manner and enables peer-to-peer crypto trading. Because DEXs are a type of DeFi application, they typically lack any KYC process. While the operations of Decentralized exchanges are decentralized, the scale of the governance decentralization varies greatly; some operators are…

DeFi stands for Decentralized Finance. DeFi purports to remove financial institutions or other centralized third-party institutions from a financial services platform. The financial products, services, and instruments are implemented in code via smart contracts and are made up of independent parts that are brought together without the use of traditional intermediaries like banks. DeFi structures…

A Digital Asset Customer is a Digital Asset Entity that uses the services of a bank or other formal financial institution. The term “DAC” was first used to describe a broad grouping of cryptocurrency-based customers in the U.S. Department of the Treasury’s OCC enforcement action against M.Y. Safra Bank in early 2020. Alternative names include…

Digital Asset Entity is an umbrella term referring to range of businesses built on cryptocurrency transactions. Digital Asset Entities include Virtual Asset Service Providers (VASPs) and cryptocurrency ATMs (which are financial institutions in their own right) in addition to gambling sites, incubators, and other entities which use crypto but are not classed as financial institutions.…

A dusting attack (also known as crypto dusting) is an attack where an extremely small amount of crypto is sent to thousands (or more) of wallet addresses. The goal of this attack is to de-anonymize some of these addresses. Dusting attacks have been utilized on most public blockchains, including Bitcoin, Ethereum, Litecoin, etc.

Enhanced Due Diligence is a KYC process of carrying out further due diligence on customers that may be seen to be more high risk to mitigate regulatory issues (e.g. Politically Exposed Persons, Sanctioned entities, or other high risk individuals).

A company or a business