Onchain Surveillance
Onchain surveillance is a process of monitoring and analyzing cryptocurrency transactions for the purpose of detecting suspicious activity or financial crimes. By utilizing blockchain technology, onchain surveillance can be used to detect illicit activities such as money laundering, terrorism financing, fraud, tax evasion and other criminal activities. The goal of this type of surveillance is to prevent criminals from exploiting digital assets for illegal purposes.
This type of analysis works by examining public blockchain data to uncover patterns that could indicate suspicious behavior or potential violations of regulatory compliance rules. This involves analyzing transaction histories and identifying any entities involved in the transaction that may have connections with sanctioned organizations or individuals. As well as identifying potential red flags in individual transactions, on-chain surveillance can also look at broader trends across multiple wallets and accounts to spot networks which may be engaged in nefarious dealings.
The development and utilization of on-chain surveillance has become increasingly important due to the anonymity offered by cryptocurrencies such as Bitcoin (BTC). It has become an essential tool for regulators seeking to protect investors from criminal activity while allowing legitimate users access to these innovative technologies without fear of exploitation. Additionally, it allows exchanges and other crypto service providers meet their anti-money laundering (AML) obligations under applicable laws and regulations thus protecting their customers’ funds from abuse by malicious actors.
