CipherTrace Launches Armada To Help Banks Detect Risky Crypto Blind Spots

By RTTNews Staff Writer | Published: 4/29/2020 10:37 AM ET

Blockchain security firm CipherTrace is expanding its offering to banks and other financial services with the roll out of a product called Armada to enable virtual asset risk mitigation by providing critical visibility into high-risk cryptocurrency payment 'Blind Spots.'

The product will help protect them from virtual asset laundering risks, illicit money service businesses, and crypto-related threats. It will enable banks to identify virtual asset customers, flag risky cryptocurrency transactions, and perform due diligence on virtual asset service providers (VASPs).

Armada also works with a bank's existing monitoring tools to identify transactions with VASPs, including those with weak KYC or operating as unregistered money service businesses (MSBs).

According to CipherTrace, a top US bank will typically process upwards of $2 billion in undetected crypto-related transactions annually. Ten out of ten top US retail banks have consumers or small businesses transacting with cryptocurrency converters, while 8 out of 10 top US banks unknowingly harbor unregistered crypto MSBs. At least 55% of top 500 cryptocurrency providers lack good KYC.

The lack of visibility and preparedness on the part of banks and other financial institutions makes them vulnerable to fraud and compliance exposure. They also risk facing fines, reorganization, and even jail time for failing to achieve compliance, whether knowingly or unknowingly.

The Armada data feeds enable customer due diligence (CDD) and transaction monitoring systems to help mitigate operational, legal, reputational, and counterparty risks.

CipherTrace machine learning algorithms calculate risk levels for exchanges, addresses, wallets and other entities based on known associations, criminal addresses, and money laundering services.

Initially funded by the U.S. Department of Homeland Security (DHS) Science and Technology (S&T) and Defense Advanced Research Projects Agency (DARPA), CipherTrace is backed by leading Silicon Valley venture capital investors. It was created to develop cryptocurrency and blockchain tracing and security capabilities.

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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

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