Bitcoin transactions get AML screening solution
Blockchain intelligence firm Elliptic is introducing anti-money laundering risk assessment to its bitcoin transaction monitoring and compliance products.
The fintech company has partnered with LexisNexis Risk Solutions, a global data, technology and analytics firm to build a proof-of-concept that leverages financial intelligence data from LexisNexis and presents it alongside Elliptic’s proprietary risk scoring. This means that for the first time, companies can have bank-grade risk management applied to bitcoin transactions.
Elliptic uses LexisNexis’ (extensive) database, which maintains negative media content among other information, to identify whether bitcoin transactions are linked to identities that are considered heightened-risk individuals or entities and are on global sanctions watchlists. Elliptic is also able to notify its customers if a transaction is linked to the proceeds of hacking attacks.
“There is a big concern that when a company is engaging with bitcoin, they may inadvertently be mishandling proceeds of crime and not be able to identify those to the standards the industry requires,” Kevin Beardsley, Elliptic head of business development, tells GTR. According to him, the inability to perform these bank-grade checks and the level of control that the banks would expect is a major roadblock that’s keeping mainstream financial services away from bitcoin transactions.
The removal of this hurdle should encourage new banking relationships and help financial services providers feeling more comfortable in engaging with bitcoin. “More banks, fintech start-ups, payments companies and e-commerce businesses can further consider the usefulness of the permission-less blockchain because as of today they are able to deploy best-of-breed money laundering screening against bitcoin. As a result, the virtual currency potential evolves to a new level – from possible conduit for money laundering to trusted technology along the economic value chain,” says Thomas C. Brown, senior vice-president of US commercial markets and global market development at LexisNexis Risk Solutions.
Elliptic has also recently partnered with the Internet Watch Foundation (IWF), a UK non-profit organisation, to combat the use of bitcoin to acquire and distribute child pornography. “We form partnership with the best entities that can provide us with data that we think our stakeholder will value and we can continue to integrate these into our products,” says Beardsley.take me back