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Tracing illegal crypto funds through banks now possible

tracing Illegal crypto

Tracing illegal crypto is now possible thanks to a new product by CipherTrace. The firm has come up with a new product, Armada that will protect banks with potential risks that come with crypto exchanges. The startup that is DARPA-backed will help banks in detecting illegal crypto funds.

Illegal crypto has become a threat to the banking sector but with the new tool, it is possible for banking institutions to minimize the risks the crypto sphere poses. Industry fraudsters are becoming tech savvy every day and keen on exploiting any weak link in the banking sector.

Saving billions through tracing Illegal crypto

CipherTrace a blockchain intelligent outfit based in Silicon Valley says U.S. banks have been handling over$2 billion crypto transactions annually without knowing.  This exposes these institutions to fraud and other crypto-related crimes. However, every 8 out of 10 banks are in illegal transactions knowingly.

The revolutionary tracing illegal crypto product that was launched earlier today will turn around the malpractice and help banks comply with AML guidelines. This new software christened Armada is a tool that will help lower the risks involved when dealing with Virtual Asset Service provision (VASP).

The tool uses machine learning and forensic algorithms in monitoring digital asset transactions and come up with fool-proof evidence on fraudulent activities. The software works on crypto ATMs, exchanges and individual users.

As per John Jeffries the financial analysts at CipherTrace::

The information collected about users as part of KYC is meant to ensure the exchange is abiding by all AML and Combating the Financing of Terrorism (CFT) requirements in addition to international sanctions. Without collecting some information on users, exchanges would have no ability to decipher whether a criminal is using their services to launder money.

Tracing Illegal crypto in the dark web

Through the system, the firm will be able to gather data on dark web activities. The software will be able to track crypto scams as well as ransomware attacks according to Catherine Woneis, the product management Vice President at the security firm:

This translates into a more accurate and comprehensive risk assessment of VASP anti-money laundering controls and is what enables Armada to catch MSBs that may be obscuring their true nature through different names or hidden accounts.

However, Armada’s clients for tracking down illegal crypto will be drawn from the banking sector. They are the ones facing the digital asset threat as they continue to be integrated with crypto service providers says Jefferies.

Already CipherTrace offers analytical solutions in the blockchain industry to high profile players in the crypto sphere including Rakuten, the Binance ecosystem, and Galaxy Digital. These should be the first to benefit from the tracing illegal crypto tool.


Albert Kim

Albert Kim

Albert Kim is a full time tech content developer and writer specializing in blockchain and cryptocurrencies. He has been in the tech industry for the last 7 years helping businesses scale up their potential to the next level.

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