skalex integrates Elliptic’s compliance tool
skalex integrates Elliptic’s compliance and wallet monitoring tool to screen crypto wallets and crypto-asset transactions in real-time and protect businesses from financial crime.
1. The Challenge
One of our client’s required rigorous anti-money laundering procedures to manage the risk of financial crime, comply with regulatory requirements of its country, and ensure a safer financial environment for its exchange users. The tool needed to be fully capable of detecting links to money laundering, terrorist financing and entities under sanctions.
2. The Process
We started by reviewing and comparing the top blockchain analysis providers in the market. The solution should not only include an automated monitoring system for crypto transactions and withdrawal processes but also to be highly customizable to our client’s risk appetite and regulatory requirements. Ultimately Elliptic was proposed by our client. We got the API and evaluated it and then implemented the solution.
2. The Solution
Elliptic offers a wide range of supported currencies such as BTC, ETH, LTC, BCH. We successfully integrated their tool for our client for BTC, ETH and LTC and we also enabled it for deposits and withdrawals. Elliptic has its own risk level classification, which we adapted in our software according to our client’s needs.
In general, there are 3 levels: safe (green), suspicious (yellow) and dangerous (red). Each risk level has its own numerical range, which we can adjust to the client’s needs.
For example, if 9 to 10 is set to red, whenever the screening tool detects a withdrawal to a red type address, our software will block the withdrawal and alert the exchange administrator about it at the same time. The exchange administrator can then decide what to do with the withdrawal to a red type address, allow it and block the user or reject it so that the user can try again to withdraw to a low risk address. When a withdrawal is made to an address of the yellow type (e.g. 5 to 8), only a notification is triggered to the exchange admin to inform him/her of the completion of the transfer.
Elliptic is the global leader in cryptoasset risk management for crypto businesses and financial institutions worldwide. A WEF Technology Pioneer, Elliptic is backed by investors including Wells Fargo Strategic Capital, SBI Group, and Santander Innoventures, and has assessed risk on transactions worth several trillion dollars, uncovering activities related to money laundering, terrorist fundraising, fraud, and other financial crimes. Elliptic is headquartered in London with offices in New York, Singapore, and Tokyo.
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