CipherTrace Releases Product to Help Banks Trace Illegal Crypto Funds
Every year, without knowing, banks in the U.S. process up to $2 billion in cryptocurrency funds. However, 80 percent of the banks process them for illicit money services businesses.
The Silicon Valley-based blockchain analysis company noted that Armada will help banks in dealing with this issue and remain compliant with anti-money laundering laws.
The product was made to reveal the risks associated with virtual asset service providers (VASPs) and prevent banks’ participation in fraud as well as other criminal activity.
CipherTrace said the product utilizes machine-learning algorithms, together with other forensic strategies towards monitoring cryptocurrency activity, identifying evidence of illegal funds, and mapping of account numbers to the names of cryptocurrency MSBs.
It will reveal payment flows to and from risky VASPs, including cryptocurrency exchanges, Bitcoin ATMs as well as certain cryptocurrency users, by linking routing and account numbers to VASPs.
User information retrieved through KYC is to ensure that the exchange is compliant with all AML and Combating the Financing of Terrorism (CFT) requirements together with global sanctions, said John Jefferies of CipherTrace.
Jefferies maintained that it would be impossible for exchanges to know whether criminals are using their services to launder money without the collection of certain information on users.
Data related to dark web’s financial activity which includes investment scams and ransomware attacks will be provided by the new product. Hence, it will be possible to carry out all-inclusive and accurate risk assessment of VASP anti-money laundering controls.
Jefferies said banks are the product’s major client base for now, since they have the tendency to be disinclined in taking risks with digital assets and they offer more of their services to the cryptocurrency industry.