How Our Cryptocurrency Transaction Monitoring Evolved in 2018

Chat With Us
Thanks for your interest! We'll be in touch shortly.
Oops! Something went wrong while submitting the form.

We consistently hear from customers that they need to be able to comply with anti-money laundering (AML) regulations. In April of 2018, we launched our latest transaction monitoring product developed specifically for compliance teams, Chainalysis KYT (Know Your Transaction).

At the time of launch, Chainalysis KYT was composed primarily of an API for screening cryptocurrency transactions in real time. Specifically, this allows organizations to understand the riskiness of the counterparties involved in transactions going through their service. The risk scores from Chainalysis could then be incorporated into existing compliance workflows.

The offering became so popular that we’ve been hard at work ever since, making improvements. Our goal is to design a compliance solution that:

  1. Automates the process of screening cryptocurrency transactions
  2. Simplifies how compliance professionals prioritize ongoing monitoring of user profiles
  3. Integrates with overarching compliance workflows

To that end, in September of 2018 we introduced additional capabilities. These included case management, filtering & sorting of user profiles based on certain variables, and the ability for compliance teams to look back at previous decisions and the data associated with those decisions (like an audit log or “snapshot” view).

Now at year’s end, we’ve continued to improve our products to meet our customers’ expectations. We’ve dedicated our latest efforts to three areas:

  • Customizable risk levels per category or specific service
  • Organization-wide visibility (via a dashboard)
  • Direct access to our customer success teams via in-app chat support

Read the Full Report

To get these insights and more on darknet markets, sign up to receive early access to the complete Chainalysis Crypto Crime Report: Decoding hacks, darknet markets, and scams. The report will be released at the end of January but you can sign up now to receive it days before it’s released.

Get Early Access to the Report

How Transaction Monitoring Works at Chainalysis

One of the reasons Chainalysis KYT is so popular is that it uses global anti-money laundering (AML) standards common across regulatory bodies. We apply these standards when each transaction is screened.

Cryptocurrency businesses also need to understand the aggregate risk profile of each of their users. That’s why Chainalysis KYT provides a view of risk profiles at the user level, which reflects all of a user’s screened transactions. For example, if an organization has a user who receives funds from a darknet market, our software automatically flags that transaction as high risk. If the user sends funds to a regulated exchange, our software marks that transaction as low risk. And so on. Every screened transaction feeds into a user’s risk profile. Chainalysis KYT displays all user profiles, sortable by high, medium or low risk (using traffic light colors) for easy scanning.

We apply our risk methodology in real time to all users within an organization’s user base. This saves compliance teams from laborious, manual screening work. They can instead focus on developing comprehensive compliance programs. Organizations that work with us tell us this has enabled them to meet regulatory expectations and launch or grow their businesses.

Customizable risk level

We’re now giving our customers the ability to adjust the risk level of a category or a service. For example, not all jurisdictions around the world treat gambling the same way. In some countries, gambling is not considered a legitimate business activity and thus online gambling sites would be treated as high risk. In other countries, gambling is not considered illicit, which means properly licensed online gambling sites would be treated as low risk.

The ability to customize the risk level of categories and specific services means our customers can automate even more of their compliance workflows.

Organization-wide dashboard

One of the most useful facets of Chainalysis KYT is having a view of all users and their risk profiles directly accessible upon first logging in. It provides a visual alert of which users have high risk profiles and therefore require the most immediate attention. In keeping with the spirit of simplified visual cues, we have now launched a dashboard that summarizes key indicators at the total organization level. For example, organizations can now see what percentage of their user base is falling under high, medium or low risk. They will soon be able to see things like total exposure by category, or total transaction volume per day. These and other metrics will provide our customers additional understanding of their organization’s total exposure trends over time.

In-app chat

At Chainalysis, we strive to provide as much support to our customers as we can. To make it easier to interact with us, we added in-app chat to Chainalysis KYT. This allows our customers to send us questions or feedback without having to leave the environment. Our team typically responds within minutes.

Looking ahead

We know software is most valuable when it makes the lives of our customers easier and more productive. This means we’ll continue to add intuitive capabilities to our compliance products while increasing versatility for ongoing transaction monitoring. In the coming months, we will improve how transaction information is displayed. We will also boost our monitoring capabilities for other cryptocurrencies beyond Bitcoin. And we will deepen the integration with Chainalysis Reactor, which is used for enhanced due diligence and investigations.

The momentum around cryptocurrency compliance is only just starting and we look forward to continuing to offer software that builds trust in blockchains.

Thank you! We'll be in touch shortly.
Oops! Something went wrong while submitting the form.
Thank you! We'll be in touch shortly.
Oops! Something went wrong while submitting the form.
Thank you! We'll be in touch shortly.
Oops! Something went wrong while submitting the form.
Oops! Something went wrong while submitting the form.
Please check your mailbox for a copy of the report.
Oops! Something went wrong while submitting the form.
Next article

Chainalysis Team

Join Our Exclusive Webinar

Jan 31, 12PM ET

Chainalysis senior economist, Kim Grauer, will answer audience questions on our latest research in a live webinar.

Register for Webinar