If you regularly receive cryptocurrency to your wallet from other users, you should be wary of dirty coins. They compromise all assets at the address, which is why they will not be accepted by legal exchanges and exchangers. To prevent this from happening, crypto businesses and private investors check the purity of incoming transactions.
AML checks are a way to combat fraudsters, which prevents them from using illegally obtained coins. Together with AML service GetBlock we tell you how to reduce the risks of receiving a dirty cryptocurrency, as well as assessing the risk of counterparties and the cost of verifying transactions. And we also give a promotional code for free checks of transactions and addresses in GetBlock.
Briefly about GetBlock
The GetBlock service assesses the degree of risk of transactions and wallets in the Bitcoin, Ethereum, Bitcoin Cash, Zcash, Dash and Monero blockchains. It saves the results of the check with link access.
Also, GetBlock works like a regular blockchain explorer: displays blocks, transactions, hashrate, transfer volumes and other on-chain data.
Upon registration, the user receives one free AML check. Enter promo code after registration FORKLOG22 in your account settings to get five more checks.
How Exchanges Recognize Dirty Cryptocurrency
Transactions on the Bitcoin blockchain and its forks are like bank checks. The registry stores records of user balances in the form of UTXO – unspent transaction output, unused transaction outputs. When a user sends tokens to someone, the blockchain “redeems” the used UTXO and instead creates two new ones: a transfer for the recipient and change for the sender.
Example: Alice has 1 BTC in her wallet. She sent Bob 0.3 BTC. The blockchain recorded her transaction as “Alice used 1 BTC UTXO, Bob received 0.3 BTC UTXO, Alice received 0.7 BTC UTXO.”
Blockchains do not delete UTXOs and keep a history of each unspent output up to the point at which the coins are mined by the miner. With the help of these records, blockchain analytics services can track which addresses specific coins passed through.
According to current international anti-money laundering regulations (AMLD5 directive), wallets and transfers from:
- illegal casinos;
- darknet marketplaces;
- mixers;
- fraudsters;
- scam projects;
- recipients of stolen cryptocurrencies.
AML services collect information about such addresses and enter them into their databases. When checking the wallet, they calculate the percentage of funds that came from dangerous UTXOs. So they form the level of risk.
Exchanges and exchangers check user addresses in the databases of AML services. If there are high-risk UTXOs on the wallet, the AML crypto service can freeze the user’s deposit.
What does risk level mean?
When checking addresses, services calculate their risk level – the ratio of coins from different sources. If there are few suspicious UTXOs, then the address receives a low risk level. The exchange will not block a deposit from such a wallet.
However, if the address received most of the cryptocurrency from a suspicious source, then it also becomes suspicious. At a risk level of addresses above 70%, exchanges may block the user’s deposit and require proof of the origin of the funds. Regular checking of the wallet avoids the confiscation of funds in cases where the user accidentally bought a compromised cryptocurrency.
Exchanges and other services with AML checks immediately freeze transactions with a risk level of more than 90%. Blocking of high-risk assets — one of the recommendations Financial Action Task Forces on Money Laundering (FATF).
How to protect your wallet from dirty coins
Private investors, small and medium businesses run the risk of accepting suspicious cryptocurrencies on their main wallet and lowering the purity of other coins. You can protect yourself from dirty cryptocurrencies like this:
- Accept each new transfer to a separate address.
- Perform AML checks on translations.
- After that, decide whether to keep the cryptocurrency and complete the transaction or not.
We checked operations from several exchanges and exchanges and made sure that they really accept cryptocurrency under this scheme.
Large blockchain analytics services operate on a subscription model. This is convenient for large businesses: for a fixed fee, the company receives an unlimited number of checks, as well as additional options such as integrating checks into an application or visualizing suspicious address transactions. The cost of tariffs starts from several thousand dollars, and most services provide checks only after direct contact.
Private investors, as well as small and medium-sized crypto businesses with 50-100 transactions per day, can buy packages with a fixed volume of services. For example, GetBlock offers three tariffs:
- Flexible – from 5 to 100 checks. The cost of one AML check is $1;
- PRO – 250 checks with API integration. The cost of the tariff is $125, the cost of one check is $0.5;
- The maximum is 1000 checks with API integration. The cost of the tariff is $300, the cost of one check is $0.3.
When purchasing the maximum tariff, the user also gets access to the GetBlock affiliate system.
GetBlock accepts payments in Bitcoin, Litecoin, Tether (USDT TRC20) and Payeer.
conclusions
In any blockchain there is a dirty cryptocurrency: either it was stolen or used in illegal operations. Transactions with such coins compromise the rest of the user’s assets and increase the risk of blocking the account on exchanges that use AML services.
Crypto business and private investors can protect their cryptocurrency from blocking. To do this, you need to receive transactions to one-time addresses, check their degree of risk in an AML service like GetBlock and transfer only pure cryptocurrency to the main account.
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If you regularly receive cryptocurrency to your wallet from other users, you should be wary of dirty coins. They compromise all assets at the address, which is why they will not be accepted by legal exchanges and exchangers. To prevent this from happening, crypto businesses and private investors check the purity of incoming transactions.
AML checks are a way to combat fraudsters, which prevents them from using illegally obtained coins. Together with AML service GetBlock we tell you how to reduce the risks of receiving a dirty cryptocurrency, as well as assessing the risk of counterparties and the cost of verifying transactions. And we also give a promotional code for free checks of transactions and addresses in GetBlock.
Briefly about GetBlock
The GetBlock service assesses the degree of risk of transactions and wallets in the Bitcoin, Ethereum, Bitcoin Cash, Zcash, Dash and Monero blockchains. It saves the results of the check with link access.
Also, GetBlock works like a regular blockchain explorer: displays blocks, transactions, hashrate, transfer volumes and other on-chain data.
Upon registration, the user receives one free AML check. Enter promo code after registration FORKLOG22 in your account settings to get five more checks.
How Exchanges Recognize Dirty Cryptocurrency
Transactions on the Bitcoin blockchain and its forks are like bank checks. The registry stores records of user balances in the form of UTXO – unspent transaction output, unused transaction outputs. When a user sends tokens to someone, the blockchain “redeems” the used UTXO and instead creates two new ones: a transfer for the recipient and change for the sender.
Example: Alice has 1 BTC in her wallet. She sent Bob 0.3 BTC. The blockchain recorded her transaction as “Alice used 1 BTC UTXO, Bob received 0.3 BTC UTXO, Alice received 0.7 BTC UTXO.”
Blockchains do not delete UTXOs and keep a history of each unspent output up to the point at which the coins are mined by the miner. With the help of these records, blockchain analytics services can track which addresses specific coins passed through.
According to current international anti-money laundering regulations (AMLD5 directive), wallets and transfers from:
- illegal casinos;
- darknet marketplaces;
- mixers;
- fraudsters;
- scam projects;
- recipients of stolen cryptocurrencies.
AML services collect information about such addresses and enter them into their databases. When checking the wallet, they calculate the percentage of funds that came from dangerous UTXOs. So they form the level of risk.
Exchanges and exchangers check user addresses in the databases of AML services. If there are high-risk UTXOs on the wallet, the AML crypto service can freeze the user’s deposit.
What does risk level mean?
When checking addresses, services calculate their risk level – the ratio of coins from different sources. If there are few suspicious UTXOs, then the address receives a low risk level. The exchange will not block a deposit from such a wallet.
However, if the address received most of the cryptocurrency from a suspicious source, then it also becomes suspicious. At a risk level of addresses above 70%, exchanges may block the user’s deposit and require proof of the origin of the funds. Regular checking of the wallet avoids the confiscation of funds in cases where the user accidentally bought a compromised cryptocurrency.
Exchanges and other services with AML checks immediately freeze transactions with a risk level of more than 90%. Blocking of high-risk assets — one of the recommendations Financial Action Task Forces on Money Laundering (FATF).
How to protect your wallet from dirty coins
Private investors, small and medium businesses run the risk of accepting suspicious cryptocurrencies on their main wallet and lowering the purity of other coins. You can protect yourself from dirty cryptocurrencies like this:
- Accept each new transfer to a separate address.
- Perform AML checks on translations.
- After that, decide whether to keep the cryptocurrency and complete the transaction or not.
We checked operations from several exchanges and exchanges and made sure that they really accept cryptocurrency under this scheme.
Large blockchain analytics services operate on a subscription model. This is convenient for large businesses: for a fixed fee, the company receives an unlimited number of checks, as well as additional options such as integrating checks into an application or visualizing suspicious address transactions. The cost of tariffs starts from several thousand dollars, and most services provide checks only after direct contact.
Private investors, as well as small and medium-sized crypto businesses with 50-100 transactions per day, can buy packages with a fixed volume of services. For example, GetBlock offers three tariffs:
- Flexible – from 5 to 100 checks. The cost of one AML check is $1;
- PRO – 250 checks with API integration. The cost of the tariff is $125, the cost of one check is $0.5;
- The maximum is 1000 checks with API integration. The cost of the tariff is $300, the cost of one check is $0.3.
When purchasing the maximum tariff, the user also gets access to the GetBlock affiliate system.
GetBlock accepts payments in Bitcoin, Litecoin, Tether (USDT TRC20) and Payeer.
conclusions
In any blockchain there is a dirty cryptocurrency: either it was stolen or used in illegal operations. Transactions with such coins compromise the rest of the user’s assets and increase the risk of blocking the account on exchanges that use AML services.
Crypto business and private investors can protect their cryptocurrency from blocking. To do this, you need to receive transactions to one-time addresses, check their degree of risk in an AML service like GetBlock and transfer only pure cryptocurrency to the main account.
Subscribe to Cryplogger news at Facebook!
Found a mistake in the text? Select it and press CTRL+ENTER
