B2B Payments

DMG Blockchain Tackles AML For Crypto Exchanges

DMG Blockchain Solutions announced a new tool for crypto exchanges and enterprise payment platforms that facilitate cryptocurrency transactions aimed at enabling anti-money laundering (AML) and anti-fraud capabilities for users.

In a press release on Monday (May 7), DMG said its BitScore API is now available to exchanges and payment platforms. BitScore, built on the cloud, deploys artificial intelligence and machine learning to assess cryptocurrency flows and determine a risk score. Users submit a cryptocurrency source or destination address to the API, which then returns the risk score of the source of funds and the other parties with which that source transacts.

The solution, DMG explained, analyzes multiple generations of transactions from that source to address direct and third-party risks, with the ability to determine whether that party has transacted with dark markets or money laundering services.

“Understanding the provenance of source and destination addresses is imperative for any exchange or payment platform sensitive to regulatory compliance,” said DMG Blockchain Solutions CTO Danny Yang in a statement. “Allowing an address that accepts deposits from, or makes payments or deposits to, disreputable networks is potentially abetting their activity, which creates legal liability for banks, exchanges and traders.”

Regulatory compliance for crypto exchanges is an emerging focus for industry players. Last month, cryptocurrency exchange platform Vaultbank announced a partnership with Gordian Compliance Solutions to ensure AML and Know Your Customer (KYC) compliance.

According to Aaron Travis, COO of Vaultbank, the increased focus on regulation will ultimately be a positive trend for the cryptocurrency and blockchain market.

“If you’re on an exchange, or buying digital assets in which the originator or person selling them to you has not gone through great efforts to get to know you and [has not] undergone KYC and AML checks, then I would be wary of it,” he told PYMNTS in an interview. “If the platform you’re buying a digital currency from is not going through those hoops — those standard, basic efforts to protect the investor — you need to be wary of that.”

——————————–

Featured PYMNTS Study:

More than 63 percent of merchant service providers (MSPs) want to overhaul their core payment processing systems so they can up their value-added services (VAS) game. It’s tough, though, since many of these systems date back to the pre-digital era. In the January 2020 Optimizing Merchant Services Playbook, PYMNTS unpacks what 200 MSPs say is key to delivering the VAS agenda that is critical to their success.

TRENDING RIGHT NOW