Elliptic tackles the anonymity of cross-chain bridges with new AML Blockchain Insights service
Holistic screening, Ellipticalits new blockchain analytics service, is set to allow cryptoassets to be tracked and traced across all blockchains and assets simultaneously.
Holistic Screening aims to help cryptocurrency businesses achieve cross-chain compliance through risk insight automation.
“The way crypto is used has changed,” reveals Dr Tom Robinson, the company’s co-founder and chief scientist. “Individual cryptoassets and blockchains are no longer isolated systems, and have become part of a larger, interconnected cryptoeconomy.”
Crypto assets can be transferred between different blockchains using cross-chain bridges; which eliminates the need for centralized exchanges.
Despite billions of dollars legitimizing the crossing between Ethereum, Bitcoin and other blockchains, bridging services have become a key tool in money laundering and crime financing. Bad earnings are often moved between different blockchains as a way to avoid tracking, and exchanges that can be used anonymously have become an important facilitator of “chain hopping”.
“New innovations such as decentralized exchanges and cross-chain bridging have removed many of the barriers between assets, allowing the free flow of capital – making crypto more useful and valuable, but also opening up new avenues for cross-chain crime,” affirms Robinson.
Due to the lack of regulation surrounding their use, decentralized cross-chain bridges provide cybercriminals with unregulated options to launder and move their proceeds.
Hundreds of millions of dollars in crypto assets from ransomware and North Korean cyber activity are being laundered through cross-chain bridges, according to the company’s latest research, with decentralized exchanges being leveraged to avoid seizure of stolen assets; while “coin exchange” services in Russia and elsewhere continue to be exploited for money laundering and sanctions evasion.
The company’s recently announced blockchain analytics service will screen and track this type of activity automatically through the deployment of Elliptic’s APIs, which will enable businesses to screen customer activity at scale while maintaining cross-chain compliance.
The Holistic Screening service is powered by the company’s new blockchain analytics engine Nexus, which reportedly took the company three years to develop and is designed to programmatically track crypto asset flows across various assets and blockchains.
It merges Elliptic’s data for each cryptoasset and blockchain into a single financial network of cryptotransactions and wallets, which can then be screened by compliance teams
“With this one true holistic view, cryptoassets can be tracked across and between all blockchains and assets simultaneously, in a single screening – reducing the time needed to make a compliance decision,” Robinson continues. “Holistic screening goes far beyond simple cross-chain analysis to include a variety of techniques, including advanced smart contract and cross-chain bridge tracking.”
In addition to this, Simon Mainithe company’s CEO, said: “Having an understanding of the total risk exposure of all transactions, across all assets, presented to an institution is the holy grail of the ‘risk-based approach’ required by global financial crime regulators.
“Elliptic’s new Holistic Screening approach enables crypto compliance teams to meet and exceed this goal and to know exactly where their risk exposure is, delivering a new standard in blockchain analytics. This means institutions can make better decisions, faster.”
