AML, AML/CTF, bitcoin, crypto AML, Crypto Compliance, Cryptocurrency, Cryptoregulation, CTF, Risk assessment, RiskAML,
Scorechain released its latest report. It studies Bitcoin transactions during the last 5 years (2016-2020). The aim is to give perspective on the associated money laundering (ML) and terrorist financing (TF) risks.
Bitcoin and ML/TF risks
Bitcoin has been released for more than a decade now. During this time frame, Bitcoin usage and popularity grew consequently. This resulted in a global price increase of the cryptocurrency such as in late 2017 and especially in early 2021.
With the evolution of Bitcoin usage also comes risks. There have been cryptocurrency scams related to Bitcoin in the last few years. Bitcoin has also been used for money laundering (ML) and terrorism financing (TF) purposes. Indeed, its anonymity makes it hard to trace.
This is one of the reasons why cryptocurrency regulation has been a heated topic for governments worldwide. Governments gradually started to regulate cryptocurrency. The aim is to reduce the risk of criminals using cryptocurrencies for illicit purposes, like ML/TF.
Scope of the study
To give an overview of the evolution of ML/TF risks for Bitcoin transactions in the past 5 years, Scorechain team, analyzed Bitcoin transactions. To do so, the team computed available data in Scorechain Blockchain Analytics database from 2016 to 2020. For example, the report analyzes the evolution of Bitcoin transactions, of licit/illicit transactions or transactions at the level of the jurisdiction’s regulation.
Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance since 2015, the Luxembourgish company serves worldwide customers in 33 different countries with more than 150 licenses established, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms and some LEAs.
Scorechain solution supports Bitcoin analytics with Lightning Network, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger and Tezos. The software can de-anonymize the Blockchain data and connect with sanction lists to provide a risk scoring on digital assets transactions, addresses and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.