Everything You Need to Know About Crypto Wallet Screening

Money launderers are continuously trying to evade sanctions, and some of them are more interested in cryptocurrency because they think it’s untraceable and anonymous. On 28 November 2018, its first instance happened when OFAC appointed two Iranians who demanded their payment in Bitcoin for the SamSam ransomware scheme. Since that, OFAC has included many wallet addresses and crypto services in its designations.

Due to ongoing geopolitical tension between Russia and Ukraine, sanctions are expected to prolong and crypto will be a bigger issue for enforcing them. The implications of crypto have not yet been forecasted, but virtual asset service providers (VASPs) are now approaching sanctions compliance.

This blog will explain the crypto wallet screening and how VASPs and crypto service providers can use the feature.

What is a Crypto Wallet?

A crypto wallet effectively stores and manages user private keys that are important to accessing and controlling digital currency. It’s like a digital container for your cryptocurrencies and not like traditional wallets that hold physical cash. Rather it stores the private keys that give you access to your cryptocurrency in the blockchain.

How does the risk of money laundering differ between crypto and other industries? Find out what our webinar speakers had to say!

What is Crypto Wallet Screening?

In the crypto wallet screening process, you may recognize and assess the potential risk related to its cryptocurrency wallets. This process provides a screening against global sanctions to prevent illegal activities such as fraud, money laundering, and terrorist financing.

Crypto wallet screening solutions help maintain trust in cryptocurrencies and brand reputation by quickly identifying wallets that are sanctioned.

Crypto addresses are screened against sanctioned lists, and that data, in return, contains the true entities behind them along with their links to other such wallets.

Is Crypto Wallet Screening the New Need for a Digital Ecosystem?

“Your crypto wallet is your most valuable asset. Treat it with the utmost care.”

Changpeng Zhao, CEO of Binance 

Cryptocurrency wallets make it easy for blockchain to be accessible to everyone. Crypto wallet screening is required when anyone wants to enter the cryptocurrency world while simultaneously aiming for risk-free transactions.

Payments made through cryptocurrency have minimal costs and are directly sent through both parties, but the risk of getting involved with sanctioned wallets remains the same.

Just as you enter a business deal with a sanctioned firm, the possibility is that you can face penalties or fines.

Likewise, dealing with sanctioned wallets may bring serious repercussions, so crypto wallet screening becomes inevitable in such a scenario.

While crypto wallet screening may not breach anonymity, it depicts sanctioned wallets and will direct you to which regulatory body has sanctioned it.

Pros of Crypto Wallet Screening

• After screening, a sanctioned crypto wallet can be detected against different sanction databases.
• The screening procedure helps in assessing the risk linked with a specific crypto wallet
• Crypto wallet screening is vital for compliance with AML/CTF regulations.

How Does AML Watcher’s New “Crypto Wallet Screening” Feature Help?

Due to these rising scams in the digital world, the demand for AML solutions in cryptocurrency is growing. Considering this, AML Watcher has launched “Crypto Wallet Screening”.

This advanced feature helps businesses accurately monitor and reach crypto wallet addresses, maintain regulatory compliance, and prevent illegal activities.

Virtual Guide to Crypto Wallet Screening in 08 Easy Steps

Crypto Wallet Screening solution is designed to help firms comply with AML regulations and prevent illegal activities in the cryptocurrency world. It will be more clear after exploring AML Watcher’s crypto wallet screening back office.

• This is the user interface of AML Watcher’s new feature, “crypto wallet screening,” which allows users to create new cases for screening their wallets against any sanction by entering required details, including entity type, unique identifier, date of birth, custom risk engines, and match score.
• Now, to search any case, the user will enter a wallet address in the “search entity” space and select the crypto wallet in the “entity type”. Users can also add date of birth, countries and can adjust the match score if they want to.
• Now, after searching this case, the user gets a single record.
• If you want to see this in more detail, click on the information given to get all the related details, including his address, country, region, date of birth, gender, last name, nationality, and registration number.
• Users can also search with a unique username, unique identifier and adjust the matching score to get the most relevant results.
• Now, users get multiple results from different databases.
• Users can also do the same research for any entity or business by entering its name and unique identifier to check against different databases.
• Users will get multiple results.

Top 3 Benefits of Crypto Wallet Screening

AML Watcher’s crypto wallet screening provides different benefits for firms using cryptocurrency, including:

Crypto Wallet Sanction Compliance

We help firms comply with anti-money laundering (AML) regulations, by identifying and addressing potential money laundering and terrorist financing risks, to reduce the risk of legal consequences and fines.

AML Watcher’s crypto wallet screening feature complies with “FATF recommendation 16” that required VASPs to implement certain regulations to screen crypto wallets.

Consolidated Sanction Compliance Toolkit

You can regularly monitor sanctions lists from different jurisdictions, including EU, UN, OFAC, and other regulatory authorities, by using AML Watcher’s “Crypto Wallet Screening” feature. Just enter name and address to know if the individual or firm is on the sanction list. You can also search for sanctioned crypto wallets to understand the secure use of digital currencies.

Safe Digital Currency Transactions

If you are working in NFT or in any other digital currency, you can secure yourself from fake digital transactions by crypto screening feature to save yourself from hefty penalties.