Different transaction monitoring mechanism between Fiat and Crypto

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Transaction monitoring is a type of technology that helps detect and analyze unusual transactions.

Fiat Transaction monitoring

Commonly, transaction monitoring include the assessment of the transaction’s type, size, nature, consistency with the customer’s risk profile, and previous transaction history.

  • Basic KYC of the customer. PEPs, blocklist, and watchlist screening.
  • Identification of the client. The name of the sender is always written on the receipt, so that you can match it with the name stated in your agreement.
  • Transaction analysis. Monitor previous and future transactions to identify the unusually large, frequent or uncommon transactions.
  • Risk assignment. Determine the risk level of the a transaction based on the business policy.
  • Suspicious Activity Report (SAR). Regulators require that reports be kept for a minimum of five years and must be available at all times.

Crypto Transaction monitoring

In the cryptocurrency world, transaction monitoring is a little different and more complex. Due to the anonymity of transactions, cryptocurrency transactions are always considered high-risk and are approached with strict due diligence measures.

  • Address cluster detection. Identification of the cluster owner. The blockchain address itself is anonymous, so it can only be analyzed and risk based on the owner of the cluster that the address belongs to.
  • Transaction analysis. Screening of connections between the address and other addresses in the blockchain. Analyze the transactions up until the final determined address (wallet) entity or cluster, and calculate the possible risk score.
  • Suspicious Activity Report (SAR). Given the high risk associated with anonymous transactions in cryptocurrency, filing and keeping reports is even more important.

 

With KryptoGO’s one-stop KYABC (Know Your Address/Business/Customer), your compliance work is done in KryptoGO and automated due diligence can be done with minimal effort.