CipherTrace: banks fail to identify up to 90% of suspicious crypto transactions

The researchers believe that monitoring systems for financial institutions are ineffective.

Banks are unable to identify up to 90% of suspicious transactions involving digital assets. This is the conclusion reached by the specialists of the analytical company CipherTrace.

Over the past two years, financial institutions have reported the discovery of 134,500 suspicious transactions that relate to digital assets. According to the CipherTrace team, these results indicate that bank employees are simply unable to record other fraudulent transactions. The indicated number of episodes, according to the researchers, is only a small part of the total mass of suspicious transactions.

According to the CipherTrace team, one of the reasons for the low detection rates of fraudulent transactions related to digital assets may be the ineffective security systems of financial institutions.

A scheme for laundering funds received on the darknet through banks. Data: CipherTrace Research

The specialists drew attention to the fact that many banks use the data reconciliation method to detect suspicious transactions. Such a system involves the use of a readymade list of names of digital asset exchanges and information received from transaction providers.

Many trading platforms operate under a different name. Some companies manage to change their name. At the same time, banks do not receive timely information to make adjustments to the system. The chosen method, according to CipherTrace experts, negatively affects the identification rates of fraudulent transactions. Losses, according to experts, can be up to 90%.

The research team is confident that banks need to expand their monitoring area. In particular, the list of crypto platforms should include small sites that provide services for conducting transactions with digital assets.

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