Analyst firm CipherTrace has deployed a risk prediction system that alerts exchanges, investors, and investigators about suspicious cryptocurrency transactions in real time.
According to CipherTrace, the tool will assign a risk level based on the history of on-net transactions. Incoming cryptocurrency transactions with suspicious links, for example from countries under sanctions or fraudulent companies, will receive a “high risk” rating.
CipherTrace maintains that the system respects users’ privacy and does not process personally identifiable information. CipherTrace chief financial analyst John Jefferies said the system could alert exchanges of suspicious transactions related to the recent hacking of popular Twitter accounts.
CipherTrace customers can start using the tool from its launch on Tuesday July 21st. Jeffreys declined to reveal how large this customer base is, saying only that the company’s customers include Binance. Previously, CipherTrace announced 150 partners.
Blockchain analysts use risk ranking systems extensively to track money laundering, sanctions violators, and terrorist financing organizations. CipherTrace’s competitors Chainalysis and Elliptic have already implemented similar tools.