Crypto Intelligence for AML Compliance

December 14, 2020

crypto currency

As the usage of virtual assets increases, so does the importance of understanding crypto intelligence for AML compliance. Financial institutions have the obligation to identify and report suspicious activity concerning how criminals and other bad actors exploit virtual assets or cryptocurrencies for money laundering, sanctions evasion, and other illicit financing purposes. However, most institutions are unable to effectively detect and monitor virtual asset-related transactions.

 

Using Crypto Intelligence Data for AML Compliance

To help solve this problem, Alessa integrates cryptocurrency intelligence data from CipherTrace to allow financial institutions to implement effective controls to identify, monitor, and report suspicious activity involving virtual asset-related transactions. This partnership has shown that utilizing crypto data can inform and improve one’s AML compliance program.

Compared to adhoc systems that rely on common name matching to identify transactions with cryptocurrency exchanges, the use of CipherTrace data allows financial institutions to identify payments to peer-to-peer cryptocurrency exchangers and payments  to or from virtual asset service providers (VASPs), and report on suspicious transactions flowing through their institution to higher risk counterparties.

Effective identification, monitoring and reporting of VASPs—including crypto exchanges, Bitcoin ATMs, and virtual asset custody providers—and their associated transactions has the following benefits:

  • Increasing compliance to AML/CTF regulations by recognizing undisclosed digital asset customers and payments with higher-risk VASPs
  • Superior VASP matching with legal name, alias, and bank account information
  • Decreasing time spent by compliance teams to identify crypto-related activities
  • Reducing the number of and time spent on investigating false positives

 

Benefits of using Alessa and CipherTrace

 

A better solution for compliance:

  • Use one solution for sanctions, PEPs, watch list and crypto screening. Choose from on-demand, periodic or real-time screening.
  • Incorporate results from screening into onboarding, transaction screening, risk scoring and regulatory reporting processes
  • Use automated workflows and case management for investigations. Track all activities for auditors and regulators.
  • Reduce workload and have a holistic view of risks across the organization

 

Reliably manage risks associated with virtual assets:

  • Rely on a proven source to identify peer-to-peer crypto exchanges and VASPs
  • Identify people associated with VASPs and their specific roles
  • Identify all transactions associated with VASPs
  • Screen high-risk transactions
  • Update risk scores with entity and transaction information for a risk-based approach to compliance

To learn how you can optimize your due diligence activities and use crypto intelligence for AML compliance with Alessa, contact us today.

 

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