Crypto exchanges can now more easily freeze “risky” transactions
2 min readBlockchain-based company, CipherTrace, introduced the “predictive capabilities” of its crypto monitoring software, Armada. The upgrade is designed to better help crypto exchanges and similar companies find and freeze transactions that may be associated with crime. New tools, which include real-time analysis and predictive risk assessment, are already available to existing customers and will be offered to new clients at the end of July.
The upgrade comes at the right time. Just last week, the technology world was shaken by a massive hack on Twitter, in which fraudsters took control of more than a hundred accounts. The scam earned more than $ 120,000 in Bitcoins from unsuspecting followers on Twitter before crypto exchanges like Coinbase began freezing transactions to address the scammer’s wallet.
Find and freeze
The latest technology from CipherTrace will help exchanges to be even faster in such a move. John Jefferies – Chief Financial Analyst at CipherTrace – explained how it works. Bitcoin transactions will be evaluated using the company’s monitoring system and algorithm before being added to the blockchain.
“Crypto exchanges, ATMs, hedge funds and other [virtual asset service providers] use our software to evaluate transactions as they flow to their platforms,” he said. “Our AI rates transactions from low to high money laundering risk based on whether funds have been defaced.”
Before confirmation, BTC transactions are stored in the so-called Mempool and must wait for verification. It can take from 10 minutes to several hours for transactions to be finalized on a blockchain. The goal of CipherTrace technology is to help crypto exchanges and other companies identify “risky” transactions before they are final.
CipherTrace identifies a transaction as a potentially high risk if the data indicates that the address participating in the transaction may be associated with a sanctioned area or entity. The data may also place the address in one of the following categories: criminal, black market, gambling, malware, ransomware, or mixer.
The intention is to help crypto businesses avoid illegally obtained funds from criminals or even terrorists.
“Point-based risk assessment is based on sources of funding,” Jefferies explained. “When transactions enter the mempool, CipherTrace can see those transactions and know where they came from before they are written to the blockchain. This allows our customers to ‘see into the future’ and stop resources when they are on the way.”
According to Jefferies, CipherTrace has visibility about 87% of global trading volume and boasts hundreds of millions of allotted points. This allows the company to decipher which resources are clean and which can be linked to criminals.”
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