AML Risk Reports are a core feature of Coinfirm’s industry-leading AML Platform.
They are used for checking the risk of blockchain addresses and their owners. Whenever there is an incoming transaction from an unknown source or an outgoing crypto transaction to an unknown destination address – generating an AML Risk Report is a must.
Designed for compliance officers needing detailed reports for crafting Suspicious Activity Reports and knowing client risk exposure, they are available in standard and enhanced formats.
What do AML Risk Reports contain?
At the beginning of each AML Risk Report, a summary is available with an address, its owner’s name (if identified) and the balance given in crypto and USD.
For blockchains that support tokens, the balance in the native coin (like ETH) and a total for all supported tokens (like USDT, BAT, COMP etc.) is viewable.
On the top right-hand corner, buttons can be found to download the AML guidances or to generate a report in PDF format.
The next section is the most important one: C-score analysis.
The C-score is a number between 0 and 99 that reflects the illicit crypto activity risk evaluated by Coinfirm’s AML platform on a blockchain address:
- C-score between 0 and 32 is marked as Low
- C-score between 33 and 65 is marked as Medium
- C-score above 65 is High
Around the C-score, what types of risk indicators having the biggest impact on the overall risk score can be observed. Detailed documentation of how C-scores are calculated can be found in the guidance available on the platform.
Below the C-score chart, the report shows a complete list of illicit activities risk indicators found for the crypto address in question. Coinfirm’s AML Platform supports over 300 different proprietary risk indicators and if any are valid for the blockchain address in question, it is listed in this segment of the AML Risk Report.
For some risk indicators (aka as ‘flags’), additional information is provided – as seen above, showing which sanction list the crypto address is on and from when the address was put there. If compliance officers have any questions about the meaning of a flag, they can simply click on the (?) icon and see the detailed description.
Flags with a red exclamation mark (as above) are risk indicators that have an impact on the C-score of AML Risk Reports on cryptocurrency addresses. However, there are also informative flags that do not raise a C-score, but can be additional useful information for an analyst:
Together with a Risk Source add-on, additional information about sources of risks is provided for indirect risks.
Owner of the Address
Below the flags, compliance officers can see a comprehensive set of information about the owner of the address:
The ‘owner’ of an address is the entity that has power over the private keys in order to sign transactions for the cryptocurrency address in question. In the example shown above, this is the Huobi cryptocurrency exchange. As we can see, AML Risk Reports also provide information about Geographical and Industry risks and the number of all addresses that – according to our database of advanced clustering algorithms and other analysis methods – belong to the same owner.
For some cryptocurrency addresses, a note about an ‘Authorized User’ can be found – somebody that used them, but technically did not own the cryptographical private keys. For example, a client of cryptocurrency exchange.
Near the owner info, ‘profiles’ can be found – labels for the address, for the owner and for the authorized user describing what type of business or activities it has:
The next section of an AML Risk Report on cryptocurrency addresses is the Financial Analysis segment. Having analyzed all the transaction that took place on the blockchain, we are able to show its summary, charts for transactions and balance change:
For Ethereum addresses that contain other ERC-20 tokens, such information is directly shown:
What’s more, compliance officers can view the table with balances for all tokens that have ever been present on the address. For each of them there is the ability to generate an Enhanced AML Risk Report for a selected token. This will analyze only transactions made in that selected token, with a potentially slightly different C-score.
Appendixes and Glossary
At the bottom of the AML Risk Report on a given crypto address, additional data can be found which may be useful in certain cases:
- Detailed descriptions of all risk indicators that were raised
- Financial analysis for last 3, 6 and 12 months
- A footer with report metadata
Standard and Enhanced Reports
When generating an AML Risk Report, one must choose the type of report. Coinfirm’s AML Platform provides two types:
- Standard AML Risk Reports for getting basic information (for simple go/no-go decisions),
- Enhanced AML Risk Reports for getting detailed data about discovered risk and relations of the address.
Usually the flow of generating risk reports is as below:
Briefly speaking, compliance officers of crypto obliged entities can use standard AML Risk Reports on a daily basis and if the resulting C-score is found to have a high-risk, an enhanced report for more details can be requested.
When to Use
AML Risk Reports are the most important feature of the AML Platform. They can be generated ad-hoc (by entering the address on the dashboard), but they are also available from all of the other platform’s tools:
- Monitoring Panel – to get a current or historical report for monitored address
- Visualizer – for a selected node of the graph
- Transaction Report – for detailed info about transaction party
- Case Management – when a report is a basis for further analysis