Protect your business with automated wallet screening. Detect high-risk transactions instantly and ensure compliance with global AML regulations.

How to Ensure Safe and Compliant Crypto Transactions?

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Based on an analysis, cryptocurrency related crime has reached around $20.1 billion representing a 40% rise in illegal transactions over prior years. While ransomware attacks were responsible for over $500 million in cryptocurrency payments and hacking resulted in the theft of over $3.8 billion. In the meantime, more than 10 million cryptocurrency wallets connected to questionable activity were reported by law enforcement highlighting the vital necessity of strong compliance mechanisms like automated crypto wallet screening to fight financial crime in the digital era.

What is the importance of an Automated Cryptocurrency wallet?

Digital wallets are online bank accounts that allow the facility to send, receive, and save money over the internet. Although they are incredibly convenient but also pose a risk to the financial system at the same time. Moreover,  the process of verifying the identification and risk profile of the wallet holder as well as their transactions is known as wallet screening. This whole procedure is required to stop illegal acts like fraud, money laundering, and financing terrorism from being made possible by these online financial channels.

Inefficient wallet screening procedures can lead to significant fines which might harm one’s reputation, and in the worst situations, regulators may suspend business at the same time. The process of ongoing monitoring and screening can become too much to handle as the industry is increasing worldwide.

What are the Key Features of Automatic Cryptocurrency Wallet Screening?

Real-Time Monitoring: Automated tools provide instant alerts for high-risk wallet activity.

Comprehensive Databases: Wallets are checked against an extensive range of sources, including sanctions lists, watchlists, and suspicious transaction reports.

Enhanced Compliance: Automatic wallet screening helps businesses meet AML regulatory requirements more efficiently.

Real-World Examples of Crypto Wallet Misuse

Bitfinex Hack (2016)

Hackers stole around 120,000 Bitcoin in the Bitfinex incident which can be considered one of the biggest cryptocurrency hacks to date. They managed to transfer stolen cash across wallets over the course of time. To counter this problem, authorities used sophisticated wallet screening and blockchain tracking methods to retrieve the stolen funds. All of this process took them six years to figure out and assets were retrieved in 2022.

This case put emphasis on the importance of screening crypto wallets to trace illegal activities even years after the crime occurred.

North Korea’s Lazarus Group

Lazarus Group is a state-sponsored hacking entity from North Korea which has been linked to multiple cryptocurrency thefts in its history. Their pattern is to launder stolen funds through a complex network of wallets and mixers. Recent investigations have revealed that wallet screening tools highlighted multiple addresses associated with the group that led to the freezing of funds before they could be laundered further.

What is The Role of Crypto Scanner Alerts?

Alerts from crypto scanners are an important component of automated wallet screening as these alerts enable prompt action to stop possible financial crime by informing compliance teams of questionable transactions in real time.

How Crypto Scanner Alerts Work

Continuous Monitoring:

Crypto scanner systems guarantee real time visibility into every financial movement by continuously monitoring wallet transactions. This feature has an ability to facilitate compliance teams to remain informed about possible hazards as they emerge in the first place.

Risk Indicators Analysis:

Every transaction is carefully examined for certain risk signs, such as unusual high sums, frequent transfers, or links to wallets that have been blacklisted. These indications provide assistance in identifying the transactions that might be worth looking into further.

Risk Scoring:

Each transaction is given a risk scoring as per their nature of possible risk they could do. This score further helps to prioritize which tasks require immediate attention by reflecting the transaction’s possible level of risk.

Threshold Triggers:

Cryptocurrency system alert is triggered when a transaction’s risk score surpasses a predetermined level which is set on the wallet. These precautionary cutoff points are designed to identify any conduct that would point to dishonest or unlawful action.

Instant Alerts:

Instant notifications are generated by the high risk transactions and get forwarded straight to compliance teams. There is a prompt response which is made possible by these notifications to offer comprehensive details regarding the transaction that has been detected.

Swift Action:

Last but not the least, compliance officers get alert data exclusively which can promptly look into the transaction that has been identified and take the required actions to guarantee regulatory compliance to stop any financial crime.

How can AML Watcher facilitate you?

Automated Cryptocurrency Wallet Screening

AML Watcher’s Automated Wallet Screening provides real-time monitoring to detect and flag high-risk crypto transactions instantly. Each transaction is assessed using advanced risk scoring based on connections to blacklisted wallets, transaction patterns, and amounts. Instant alerts notify compliance teams of suspicious activity, enabling quick investigation and response. AML Watcher also offers robust reporting to meet global AML regulations, reducing the risk of fines. Stay secure with automated, efficient compliance tools tailored for the crypto era.

by Silvia Watson

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