The adoption of cryptocurrencies has accelerated in the past 2-3 years. Thanks to big names like Elon Musk, Coinbase has made transacting in cryptocurrencies more than just a passing-by fad.
The number of crypto payment gateways has increased tremendously recently, as well as the number of people who have started accepting P2P payments. While growth is happening in the crypto space, there are a few challenges that we are still solving. One of the biggest concerns is dealing with Anti-money laundering and dirty crypto money.
What is Dirty Money in the World of Crypto?
A few most commonly known crypto transactions and services that are considered as crypto dirty money are:
- Bitcoin or crypto using mixing services – Many people use crypto mixers to hide their identity and traceability. However, many governments and exchanges do not like to entertain such cryptos.
- Hacked cryptos – Crypto hacking is nothing new, and we have seen a lot of exchanges and DeFi protocols being hacked every other day. Hackers try to hide their footsteps by sending this money to non-KYC exchanges, using mixing services, or doing OTC selling.
- Sanction crypto addresses – Government financial act task force sanction addresses associated with terrorism financing and illegal activities. What it meant for you is you should not be interacting with such addresses once the sanction is live. A widely known example of this is the Tornado cash sanction.
- Darknet service or marketplace – Any wallet that has interacted with Darknet services and is used for trading illegal products for cryptocurrencies. Some of the most commonly used services in this money laundering type are child abuse, terrorism financing, drug dealing, etc.
- Ransom – The Extortioners demand payment in the form of cryptocurrencies using methods such as blackmail, Malware and etc.
How Does Crypto Dirty Money Impact You or Your Business?
When you send your crypto to any wallet associated with illicit activities, you are flagging your existing wallet too. What that meant for you is once your wallet has a link with sanctioned, hacked, or illegal activity wallet, you will have a hard time spending the money you have in that wallet. Crypto exchanges might block your account to comply with AML and FATF guidelines.
Similarly, if your business accepts crypto payments, you need to ensure you are not accepting money that is dirty crypto money. Now, many of you might be wondering if there are solutions that will let you :
- Check if the address you are interacting with is clean or not
- Is your existing wallet clean or is it suspected of receiving dirty crypto money? If yes, change your wallet by creating a new one.
- Businesses that could enable KYC when they are receiving money from a wallet that seems to be flagged
The good news is there are services that let you check any crypto wallet address on multiple blockchains for clean or dirty money. Such a service existed for a while, and with more adoption and guidelines, they are becoming popular. For savvy crypto users, these Crypto wallet checker services should be in their arsenal.
How to Check Crypto Addresses for AML Compliances –
Here I’m listing the best services you should use for checking any crypto wallet address for AML compliances.
1. WalletChecker – Great for Personal Use
Walletchecker by AMLBot is a mobile app (iOS and Android) that lets you check any crypto wallet address on 25 different parameters. This one is easy to get started and best for personal use. The service offers 1-5 checks for free, and post that, it costs about $1/check.
You can use Walletchecker to:
- Check if your existing crypto wallet addresses are at risk
- Use this before sending crypto to any unknown wallet address
- Get notified if you end up receiving dirty cryptocurrencies
2. AMLBot – For Personal & Business Use
Anti-money laundering bot is available as a web app and a Telegram app. This service serves both; an Individual and a business by offering Anti-money laundering checker API services.
Using the telegram app, you can check any crypto wallet addresses for the risk profiles based on different parameters. The telegram bot shows you the risk profile within the telegram chat window, and you can also request a .pdf file, which you could share with other users.
Here is how to use the AMLBot feature:
- Head over to the AMLBot website
- Join the telegram channel link by clicking on “Check wallet address.”
- Type check and enter the wallet address you wish to check
- Select the type of blockchain
- The bot will generate the report within minutes, and it will look something like this
- You will also get the option to generate the .pdf report that you can use for future reference or share with others.
- Here is an example of such a report
- AMLBot does offer a detailed report for any address, which costs about 15 USDT.
Steps moving forward
For you as an Individual or a business, it is of utmost importance to be mindful about sending and receiving cryptocurrencies. Bitcoin has enabled us to be our bank and opened a new financial system. However, compliance and anti-money laundering are big challenges the world faces. Such AML checker services are the solution to such a problem.
I will not be surprised if crypto wallets offer this as an in-built service in the future. I would be happier to see an option where we could reject an incoming transaction and safeguard our wallet from dirty money. If you are running a business, use a reliable Crypto payment gateway, which takes care of KYC and AML for high-risk transactions.
As an individual, here are a few things you could do –
- Interact with reliable smart contracts
- If you are dealing in P2P payments, maintain an excel sheet containing the wallet address and identity of the person/service you are interacting with. This way, you safeguard yourself in the future.
- If you are a heavy crypto user, you should use a new wallet address after every month of a quarter. It may seem inconvenient for now, but it would help you in the longer run.
- Use a burner wallet when interacting with risky smart contracts or users/services.
I will update this resource with newer and modern services as we discover more such tools. You can save this resource as a bookmark and return later for an updated list of services. If you know of more such services or building one, reach out at hello[at]coinsutra.com