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Today, we’re excited to announce the launch of Elliptic Ecosystem Monitoring, a first-of-its-kind solution that enables stablecoin and token issuers to screen their ecosystems for financial crime risk in real-time. Using a suite of proactive asset monitoring and analysis capabilities, issuers will for the first time be able to gain comprehensive insight into licit and illicit activity in their cryptoasset ecosystem.
It has become more important than ever for stablecoin and token issuers to ensure that they adopt appropriate strategies to detect and mitigate risk within their ecosystems. With the stablecoin market expected to grow to $2.8 trillion over the next five years (from $125 billion), along with new and proposed regulatory regimes emerging around the world, issuers must be able to demonstrate regulators to understand who is using their token or stablecoin and where the financial crime risks are coming from.
This need is highlighted by the increasing use of stablecoins by illegal actors. Stablecoins can prove attractive to illegal actors due to a number of factors such as the price stability they afford, transaction processing speeds and their deep liquidity across multiple blocks. Accordingly, it is more important than ever that participants in the cryptoasset ecosystem work to ensure that stable or token ecosystems are not exploited by illegal actors.
Until now, issuers have not had access to purpose-built and scalable screening solutions that allow them to easily and effectively identify high-risk activity the moment it enters their ecosystem, in real-time, to enable blocking bad actors from further exploiting their token or stablecoin.
Elliptic’s new monitoring ecosystem addresses these shortcomings by equipping issuer compliance teams with proactive review and flexible asset analytics capabilities, allowing them to prevent high-risk activity within their ecosystem as it happens, understand trends in their cryptoasset’s aggregate exposure, and stay ahead of evolving regulatory requirements.
How Elliptic Ecosystem Monitoring is revolutionizing issuer risk detection and compliance
Combining the speed and scalability of Elliptic wallet screening with the depth and breadth of our analytics capabilities, Ecosystem Monitoring enables stablecoin and token issuers to proactively monitor their ecosystems for risk and assess changes in cryptoasset exposure trends for the first time.
At its core, the solution is based on a screening and alert system which informs the issuers at the moment when high-risk actors try to interact with their ecosystem, allowing them to effectively freeze or block risky wallets, preventing further exploitation.
Using the Elliptic Risk Engine, issuer compliance teams can leverage configurable risk rules so they are only alerted to the risks they care about entering their ecosystem.
To achieve this, Elliptic first consumes transaction data for the target cryptoasset directly from the blockchain and automatically extracts recipient addresses from each transaction involving the issuer’s token or stablecoin. These recipient addresses are then screened for risk on a large scale and considering the risk assessment – everything with minimal or no engineering work on the side of the issuer.
Moreover, issuers can review the wallets of recipients interacting with their stable or token ecosystem only for the risks they care about using ellipticals configurable risk rules, meaning their compliance teams won’t be swamped with irrelevant alerts. Screening is happening in real time so that high-risk activity – including activities originating from sanctioned actors – it is detected as soon as it appears.
The issuer will then receive alerts delivered via Webhook or another system of their choice when high-risk actors in their ecosystem are identified, ensuring that the issuer’s compliance team is able to take swift mitigation measures to prevent further illegal activity.
Understanding token distribution and risk exposure trends with flexible asset analytics
Above, one of the many visualizations available with Ecosystem Monitoring that shows an asset’s exposure to different categories over time.
In addition to these proactive monitoring capabilities, Ecosystem Monitoring offers publishers new asset analytics which allow compliance teams to visualize and assess the overall exposure trends of their specific stablecoin or token and how that exposure changes over time.
Using these flexible analytical dashboards, issuers can thereby gain objective insight into the transaction history of their stablecoins or tokens, including current and historical exposure to various legal or illegal entities and category types.
The visualizations and analysis displayed on these dashboards include stablecoins or tokens total number of transactions and total volume transaction; token value sent and received by permitted and prohibited category; and token value sent and received by legal and illegal person overtime.
Dashboards further include a transaction researcher whereby users can filter their analyzes by high-risk activities and Surface the hashes of the underlying high-risk transactions themselves for the streamand facilitate further investigation.
Users can uncover hashes of high-risk transactions from their analytics to simplify further investigation.
This comprehensive view of ecosystem-wide risks can also prove invaluable in demonstrating the suitability of a stablecoin or token to regulators, and can provide regulators with assurance that the ecosystem is protected from major risks. With new regulatory regimes such as the European Union’s Market Regulation of Crypto Assets (MiCA) coming into effect, and with similar frameworks being introduced or planned in jurisdictions such as Hong Kong, Singapore, the UK and beyond, ecosystem monitoring may prove to be a critical component ensuring that your stablecoin and token meet regulatory expectations.
Ecosystem Monitoring: Screening, Alerting and Analytics for Comprehensive Risk Detection
Finally, by combining the efficiency and scale of Elliptic’s industry-leading screening capabilities with our best-in-class blockchain data, our new ecosystem monitoring solution enables issuers to demonstrate the highest level of regulatory compliance by equipping them to stay ahead and act against the risk of financial crime affecting their stable coin or token ecosystem.
Contact us today to learn more about how your organization can monitor your stablecoin or token for risk and block high-risk actors from exploiting your ecosystem using the only scalable and proactive ecosystem monitoring solution available on the market today.
