Sanctions Screening & Hops in Crypto Transactions: Ensuring Detection of Sanctions Risks
Contents
Complying with financial and economic sanctions remains one of the most significant challenges facing compliance teams at cryptoasset exchanges and financial institutions.
At Elliptic, we recently released our report Sanctions Compliance in Cryptocurrencies: Using Blockchain Analytics to Mitigate Risks, in which we describe a number of steps that compliance teams can take to identify and comply with sanctions requirements effectively. Among the key steps we outline in the report is the importance of ensuring robust transaction screening practices to enable the detection of sanctions risks.
In this article, we will take a deep dive into a key issue compliance teams face when it comes to screening crypto transactions for sanctions risks: the importance of detecting exposure to sanctioned parties through numerous “hops”, or intermediary addresses.
The Importance of Tracing Through Hops in Crypto Transactions
As illustrated in the diagram below, a cryptoasset exchange or other service provider may encounter situations where there is a …
At Elliptic, we recently released our report Sanctions Compliance in Cryptocurrencies: Using Blockchain Analytics to Mitigate Risks, in which we describe a number of steps that compliance teams can take to identify and comply with sanctions requirements effectively. Among the key steps we outline in the report is the importance of ensuring robust transaction screening practices to enable the detection of sanctions risks.
In this article, we will take a deep dive into a key issue compliance teams face when it comes to screening crypto transactions for sanctions risks: the importance of detecting exposure to sanctioned parties through numerous “hops”, or intermediary addresses.
The Importance of Tracing Through Hops in Crypto Transactions
As illustrated in the diagram below, a cryptoasset exchange or other service provider may encounter situations where there is a …