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To stay safe in the world of cryptocurrency transactions, individuals and organizations can use the growing number of block analysis tools available. As the cryptoasset market becomes more popular for the transfer of value, crypto and financial services companies are considering what security measures can be put in place to stay compliant and manage risk.
Let’s explore what types of tools are out there today.
- Crypto asset risk exposure tools
- Operational protection
- Monitoring and compliance
- Predictive analytics of cryptoassets
Crypto asset risk exposure tools
A key aspect of cryptoasset risk management is the ability to identify risk and exposure within transactions, so blockchain analysis is key. This risk management methodology allows individuals and organizations to assess the risk of transactions, be it with other parties or transactions with customers.
Real risk exposure tools like Elliptical Discoverythey analyze data sets built from millions of blockchain addresses and their corresponding data traces and work to strengthen all existing Know Your Customer (KYC) processes.
Exposing the inherent risk in certain crypto wallets allows organizations to not only conduct business safely, but also benefit from an increasingly harmonized digital cryptocurrency market. Cryptoasset risk management ensures that anti-money laundering (AML) compliance is in line with a set of regulations.
Operational protection
For cryptocurrencies or those financial institutions looking to trade a particular cryptocurrency, it can be challenging to assess the legitimacy and security of a particular cryptocurrency. This is further complicated if a single group has multiple addresses spread over many crypto assets.
Blockchain analysis has developed the ability to review wallets before a transaction is made. Now, screening is only one part of some blockchain analysis tools. A true business-critical capability is when potentially risky crypto wallet transactions can be blocked before they go through, preventing criminal activity and reducing regulatory non-compliance.
Since many individuals assume that cryptocurrency trading is an inherently risky business, it is worth debunking that myth with this kind of analysis tool. Not only does this process build trust within your organization, it also helps maintain trust in the market itself – a win-win for all stakeholders.
Monitoring and compliance
As the demand for blockchain analysis grows, these tools become more efficient and powerful. Block analysis tools have become more aligned with growing business needs.
For example, we can go now beyond verifying cryptoasset transactions in real time and predict risk before a transaction is added to the blockchain thanks to continuous monitoring of newly issued transactions. This creates an enhanced environment of consistent compliance within AML regulations.
Monitoring the blockchain and determining the origin and destination of crypto assets is critical for companies looking to mitigate risks. Block analysis tools promote transparency and trust in the cryptocurrency world.
Predictive analytics of cryptoassets
As mentioned above, block analysis tools now have predictive capabilities. With predictive blockchain analytics, a crypto wallet can be flagged as risky even before a transaction takes place and is added to the blockchain.
This is an inherent issue that predictive analytics effectively solves: once a transaction is made, custodians, crypto exchanges and other financial institutions must wait for that data to be fully realized within the blockchain before they can be analyzed. This means that companies can be exposed to unjustified risk.
With predictive blockchain analytics, there is no need to wait for this transaction to happen. Predictive technology constantly monitors the ‘mempool’ (the area where unconfirmed transactions wait before being confirmed) for new transactions.
This data is then matched with data graph engines – systems that store pre-annotated data – and calculates a pre-transaction risk score, helping to make compliance decisions.
There are many different tools available on the market today, but only truly efficient and prepared organizations will fully realize the value of block analysis platforms. That’s why we’ve created a helpful resource that dives deep into the workings of cryptocurrency, blockchain, and how financial institutions and companies can stay safe in this new financial environment.
Blockchain Analytics and Analysis – Stay Secure and Compliant with Cryptocurrency
In this online resource, you can discover how the use of blockchain analytics contributes to a more reliable and harmonious financial ecosystem. Blockchain analytics technology is increasingly meeting the needs and requirements of crypto businesses and financial institutions around the world, thus having a transformational and lasting impact on the broader cryptocurrency industry in terms of compliance and risk mitigation.
To gain further insight into how block analysis tools can help your business, please click on the link below.
