The Top 7 AML Tools For The Crypto Industry

With industry-wide crackdowns from the likes of the SEC and exacting regulatory demands coming into force in Europe, it’s never been more crucial to implement proper AML procedures.

The crypto industry has received bad press from various mainstream media sources citing how crypto can be used for all kinds of nefarious practices, money laundering in particular. Be that as it may, cryptocurrencies use blockchain technology, and therefore transactions are inherently transparent, and the trail of a suspected wrongdoer can usually be followed.

However, there are always ways and means that a bad actor, who wishes to circumvent anti-money laundering (AML) processes, can employ.

One key aspect of AML compliance is the implementation of transaction monitoring systems, such as Know Your Transaction (KYT). KYT involves real-time monitoring of individual transactions to identify suspicious activities, while the verification of addresses helps assess the legitimacy of wallet addresses involved in cryptocurrency transactions, mitigating risks associated with high-risk entities.

In a September 2022 article, the World Economic Forum (WEF) reported a 1,964% increase in cryptocurrencies that are laundered by way of decentralised finance (DeFi). This percentage was equivalent to around $900 million in laundered value.

To combat this type of activity, blockchain analytics tools and experts have made their niche in the market and are being used by companies in their struggle to become and remain compliant. Companies that provide this kind of service normally also offer the ability for a client to be able to fully investigate blockchain transactions as part of their AML responsibilities.

As the crypto sector seeks clarity in the regulatory environment in order to become a more accepted part of the financial system, complying with AML requirements will surely be a non-negotiable item on this path.

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Blockchain analytics is a form of data science focused on the analysis, identification, and clustering of data on the blockchain, which is a digitally distributed public ledger. In other words, blockchain analytics is a me

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Author: Laurie Dunn

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