On December 16, 2019, the world’s cryptocurrency intelligence leader, CipherTrace, declared the launch of CipherTrace Crypto Risk Intelligence products for banks. CipherTrace Labs found that almost all top US retail banks have unregistered cryptocurrency money service businesses (MSBs), and they are transacting funds on their payment networks. The new products can help detect cryptocurrency risk threats and provide proactive risk management services to banks and other financial institutions.
The specific features of CipherTrace’s product involve the detection of unregistered cryptocurrency MSBs, risk evaluation on crypto companies for bank relationships, acknowledgment of crypto transactions, counter-party risk scoring, and information of cryptocurrency threats within the payment networks.
According to the analysis by CipherTrace Labs, a large bank usually makes a transaction of $2 billion every year in undetected cryptocurrency transfers and, therefore, does not adhere to Anti-Money Laundering regulations. The banks must identify the MSBs before facilitating Travel Rules as per the compliance with the US Bank Secrecy Act (BSA) and Financial Action Task Force (FATF). The majority of the banks cannot detect and monitor crypto exchanges, and other Virtual Asset Service Providers (VASPs) as MSBs. On the other hand, CipherTrace is tracking more than 500 crypto-based companies and offering them filtering data, risk, and compliance scores.
Currently, banks are well-equipped with many tools and strategies for Anti-money laundering, risk management, and counter-terrorist financing of conventional payments. But they are revealed in the case of digital currencies by the traditional payment systems like SWIFT and ACH networks.
CipherTrace Crypto Risk Management provides four solutions to the banks.
- Disclose anonymous risks generated by the connection of VASPs and bank payment systems.
- It provides risk scores for more than 500 crypto exchanges and other VASPs.
- Discover unregistered MSBs and P2P schemes by using bank accounts.
- Know Dark Web risks as well as the sale of stolen financial products that use crypto-based laundering funds.
The CEO of CipherTrace, Dave Jevans, said that banks and other financial institutions are at a higher crypto risk because there is no solution to detect those threats. CipherTrace is working with advanced banking security teams to minimize these risks. Now, Crypto Risk Intelligence provides an opportunity for the banks and financial institutions to monitor and mitigate their risks. It is a solution for the banks if they are dealing with cryptocurrency companies and handling risky customers on existing payment networks for FinCEN and BSA compliance.