Combining Blockchain Analytics with Transaction Monitoring

This technical report discusses the integration of Blockchain Analytics Tools (BATs) with Anti-Money Laundering (AML) transaction monitoring solutions to enhance the effectiveness of money laundering detection in the cryptocurrency sector. It outlines the limitations of current BATs, including their inability to track fiat-to-crypto transactions and identify complex behavioral patterns associated with money laundering. The report emphasizes the need for a comprehensive approach that combines the strengths of BATs with modern AML systems to address these shortcomings. It details the importance of linking fiat and crypto transactions to gain insights into customer behavior and the necessity of utilizing AI-based models for detecting suspicious activities. Furthermore, the report presents recommendations for integrating user interfaces and creating a unified platform for monitoring transactions. It concludes by advocating for a harmonized use of BATs alongside traditional AML tools to improve compliance with money laundering regulations and effectively mitigate risks associated with cryptocurrency transactions.