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Algorand vs. Aptos
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Money laundering is a grave concern for regulators and law enforcement agencies worldwide. According to a United Nations report, the total money laundered every year equals anywhere between 2% to 5% of the global GDP, amounting to trillions of dollars.
Due to the money-like nature of cryptocurrencies, they too have become a common tool for effectively laundering money beyond borders. Given that they are borderless and anonymous, it is even harder to trace funds laundered using cryptocurrencies. This has created a demand for special solutions to:
Anti-money laundering solution is used by financial institutions, law enforcement agencies, and the government to detect any suspicious activity and illegitimate transactions.
In the article we will compare best AML software for crypto businesses and show their distinctive features.
Cryptocurrencies are digital assets like nothing the world has ever seen before. Their foundation is laid on top of a distributed and decentralized ledger called a blockchain. No central entity can control or restrict how blockchains function and the cryptocurrency transactions that take place on them.
Most legacy systems built to prevent money laundering using traditional money are rendered useless as they’re not built for systems where transactions cannot be controlled or identified. To deal with cryptocurrency money laundering, we need special platforms.
Anti money laundering (AML) software is a special platform that is well-equipped with technologically advanced tools to track and trace transactions in a decentralized ecosystem.
Cryptocurrency companies today prioritize using AML tools provided by AML platforms as lawmakers are becoming more strict regarding the law compliance of the crypto industry. It lies in the best interest of the companies, the users, and the lawmakers that cryptocurrency companies utilize AML software and tools from the very beginning.
Sooner or later, the regulators will enforce AML laws on all crypto companies. If companies are compliant with these laws from the beginning, they may easily avoid significant technical debt, which is the extra cost of restructuring the existing platform at a later stage to make amends that should have been a part of the platform since the start.
The cryptocurrency industry is now strictly under the radar of regulators worldwide. Recently, the founders of the two most widely used cryptocurrency trading platforms, BitMEX and OKEx, were indicted and arrested for their inability in AML compliance. If lawmakers can press charges against owners of such widely popular exchanges, there’s no reason to think that new and smaller exchange platforms can escape the lawmakers upon failing to comply with legal requirements. However, beyond protecting yourself, your company, and your platform from facing such a fate, here are other reasons why you should consider using AML software and tools for your cryptocurrency exchange:
A Coinfirm representative explained to us the number of factors companies must consider when choosing the right AML solutions. These include:
There are numerous platforms for AML compliance available in the market. As a cryptocurrency company, you should prefer using a crypto-specific platform that has tools specifically built for blockchain and cryptocurrencies. To help you decide the best crypto AML solutions, we have listed down five of the best service providers in the industry.
Coinfirm is a London-based blockchain analytics company that advises regulators on how to combat cryptocurrency crimes. It also enables financial institutions to follow regulatory compliance guidelines such as the FATF’s Travel Rule and AMLD5.
Its new service called “Reclaim Crypto” intends to help crypto hack and scam victims reclaim their stolen cryptocurrencies. “Reclaim Fork” is another brand new tool which allows crypto investors to reclaim their forked tokens in a quick, simple and secure way.
Founded two years prior to Coinfirm, in 2013, Chainalysis is another well-known name in the blockchain analysis and cryptocurrency AML sector. It builds exclusive software for cryptocurrency companies to comply with anti money laundering requirements.
The biggest strength of Chainalysis is its experience of working with the best in the industry. It has provided its services to government agencies such as Europol and renowned corporate firms such as Barclays and MUFG.
Founded in 2013 with offices in London, Elliptic helps crypto businesses, financial institutions, and regulators to prevent financial crime in crypto. Their blockchain analytics expertise provides accurate, actionable insights that businesses rely on to mitigate risk and be compliant.
Set up in 2015, CipherTrace claims to be the world’s first blockchain forensics team. It provides AML and financial crime investigation services to cryptocurrency companies and financial institutions. CipherTrace has worked with a wide range of private and government entities to solve crypto-related matters.
ScoreChain was also founded in 2015 with the intent to provide compliance services to crypto and blockchain companies. It has since served many crypto companies in the industry.
For the right reasons, anti-money laundering compliance is now gaining more recognition and acceptance in the industry. Measures to comply with AML requirements have become a crucial part of every cryptocurrency company. As regulations become more well-defined, it will be even more pivotal for a crypto company to comply with these laws.
Read more stories about Ulam Labs and crypto-space wrote by our specialists and engineers.
