CipherTrace Says It Can Instantly Flag Shady Transactions With Predictive Risk Scores


CipherTrace, a blockchain analytics software firm, has deployed a predictive risk-scoring system that the company says provides real-time alerts on suspect crypto transactions for its exchange, investor and investigator clients.

  • The tool will assign risk based on the on-chain histories of transacted funds, the Silicon Valley firm said.
  • Inbound cryptos with unseemly ties (from sanctioned countries or a fraud campaign, for example) would get a “high risk” score under the system.
  • CipherTrace claims the score respects user privacy, saying in a press release that it does not process any personally identifiable information. 
  • Coming days after a Twitter hacker scammed nearly $200,000 in bitcoin from hundreds of victims, the score could warn exchanges of incoming plunder, CipherTrace chief financial analyst John Jefferies told CoinDesk.
  • All CipherTrace clients can use the tool from Tuesday’s launch at 13:00 UTC (9a.m. ET).
  • Jefferies declined to state how large that customer base is, saying only that Binance is among them. CipherTrace firm has previously boasted 150 partners. 
  • The blockchain intelligence sector is broadly deploying risk-based scoring against a problematic crypto trio: money launderers, sanctions violators and terrorist financiers.
  • CipherTrace competitors Chainalysis and Elliptic already market similar tools.

Also read: Crypto Exchange Group Eyes ‘Bulletin Board’ System for FATF Compliance: Coinbase Exec

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