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The number of crimes involving cryptocurrencies is on the rise. Attackers use digital assets to finance terrorism, launder illegally obtained funds.
For opposition to activities cybercriminals use different methods, including AML verification. It is considered one of the effective methods that can be used not only by companies, but also by ordinary users.
AML verification of cryptocurrencies: what is it
AML verification of cryptocurrencies is the recognition of money laundering schemes based on the analysis of aggregated data. Suspicious transactions are identified through the analysis of all available information. There is also such a definition of AML (Anti-Money Laundering – countering money laundering) – this is the identification of cases of money laundering obtained by fraudulent means.
Customer identification (KYC) is only part of anti-money laundering. You can call KYC a set of procedures and tools, a principle within the overall AML policy. CDD, EDD and KYCC are also considered part of the general AM/CFT policy. The verification is carried out using software that analyzes transactions for risk, links to suspicious sites and platforms.
What is AML verification of cryptocurrencies for?
If digital assets are stolen from the exchange, used in fraudulent transactions, they are flagged so that the criminals can later be found. Digital assets that are called “dirty” are under the control of attackers. In order not to be detected, hackers use special services (mixers) that allow mixing transactions. Sometimes such assets end up in wallets, accounts of decent users.
If the “dirty” assets end up in the wallet, the account of a regular client on an exchange that uses AML verification, then the account will be blocked. The client will be required to provide data on where he acquired such currencies. The user may be subject to penalties for complicity in money laundering. In fact, the user will be blacklisted by cryptocurrency exchanges. It will be very difficult for him to prove his innocence, and he is unlikely to be able to sell “dirty” coins to other users later.
What services can be used to check cryptocurrencies for purity
You can specify several services that allow you to check cryptocurrency transactions for purity. For example, GetBlock offers such a function. This service checks addresses and transactions by a large number of parameters. Shows gives a general assessment of the risks of the transaction / address, paints all the indicators on the basis of which the conclusion was made: the volume of risky assets, sources – trusted, dangerous or suspicious.
There is also such a service as AMLbot. Checks transactions through its website and telegram bot. For verification, you need to pay a few cents minimum. After registering on the site, the user receives 2 free checks as a gift. It allows you to analyze wallets and transactions by 20 parameters in order to assess how high the level of risk of transactions is.
You can also use a tool such as ETHProtect. The tool conducts checks through its website. Free, provides information about addresses and transactions if they are blacklisted. It has AI elements that allow it to evolve.
Companies can use the Crystal Blockchain resource. It has 3 licenses, one is free. Free is suitable for a small company or foundation. API and PRO licenses are suitable for large companies, exchanges, payment systems, banking structures.
There is also software for companies that allows you to assess whether the cryptocurrency received on the accounts was involved in illegal transactions. Such software includes, for example, Elliptic Vault Limited, Chainalysis, Inc and Neutrino srl.
There are other services and tools that can be used to verify addresses and transactions of cryptocurrencies.
How not to become the owner of a “dirty” cryptocurrency
If the user does not want to become a holder of a “dirty” cryptocurrency, he can take a number of simple and effective actions. You should purchase digital money only on secure exchanges and services that have permission to work from regulators in their jurisdictions.
You need to keep all the screenshot and other evidence that the coins were acquired legally. It is also recommended to use 2 cryptocurrency wallets. One for cryptocurrencies obtained through mining or secure platforms. The second is for assets that are obtained from unverified locations.
By following these simple recommendations, the user can minimize the risk of becoming the owner of a “dirty” cryptocurrency and being blacklisted by exchanges, having received an account ban.
Author: Vadim Gruzdev, analyst Freedman Сlub Crypto News
#AML #verification #cryptocurrencies