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CipherTrace Unveils New Compliance Software For Banks Against Illicit Crypto Transactions

Nicholas Otieno   May 01, 2020 05:30 3 Min Read


Blockchain security and analytics provider CipherTrace has unveiled a new cryptocurrency compliance product recognized as “Armada”, which is designed to eradicate risky crypto blind spots for financial institutions and banks. The new product targets financial institutions and banks dealing with cryptocurrencies.


CipherTrace Dedicated to Help Banks

Armada targets a large number of financial institutions, which have not adopted the proper AML (anti-money laundering) and KYC (know your customer) guidelines that could assist in detecting unregistered digital asset transactions. With the use of the new tool, financial institutions would be able to meet their anti-money laundering obligations and gain visibility into risky crypto blind spots. This assists in keeping the KYC procedures secure and also conducting due diligence on all VASPs (virtual asset service providers).

Dave Jevans, CipherTrace CEO, said that: “If Kunal Kalra’s banks had been using Armada to monitor their accounts, we could have identified Kalra much earlier.”

CipherTrace works with financial institutions and banks and their existing monitoring tools to assist in enhancing their AML procedures. It also assists in tracing the source of on-chain funds, matching user IDs, and finding problematic wallet addresses. The firm is backed by Galaxy Digital owned and operated by Mike Novogratz, one of the most vocal cryptocurrency supporters within the industry.

With Armada, banks and financial institutions can learn more about counterparty risks linked with unregistered virtual asset service providers and money service businesses. Jevans further described that if M.Y. Safra Bank deployed Armada, it would easily detect illegal crypto transactions. He revealed that although the bank has not been fined by the OCC (Office of The Comptroller of The Currency), it must focus on reporting and monitoring suspicious activities and carrying out independent AML/BSA audits.  

He stated that the bank also must allow an independent party to reviews its previous activities and not only hire a BSA officer, but also adequate support staff in the next 180 days.

CipherTrace is a California-based company that provides a suite of blockchain forensic services and tools, which allow its clients to analyze crypto transactions flow like identifying laundered or hacked funds and also provides theft asset recovery service.

Cryptocurrency Theft Alarming At $4.4 Billion In 2019

According to a report released by CipherTrace, the crypto sector lost about 4.4 billion in thefts and scams in 2019, up by more than 150% from $1.7 billion in 2018. The report shows that crypto theft has increased at an alarming rate because malpractices have been taking place through crypto exchanges. The trend has been triggered by an increased number of criminals who are keen to undertake bigger heists. Criminals endeavor to use every means to chase money, which is there and ripe for taking. However, regulatory scrutiny within the crypto sector is being beefed up across the world as the market developers and participants are seeking to penetrate the crypto space. CipherTrace assists law enforcement and financial regulators in their investigations on cryptocurrency-related AML and compliance issues.

 

Image via Shutterstock

 



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