DMG Blockchain Solutions, a diversified blockchain and cryptocurrency company announced today the official launch of its ‘BitScore’ cryptocurrency deposit and withdrawal risk-scoring web API for Anti-Money Laundering (AML) and anti-fraud compliance.
The BitScore cloud-based API risk-scoring technology is used by crypto exchanges and enterprise payment platforms to quantify and manage their risk of legal non-compliance. The API, which was engineered by DMG’s Blockseer development team, is powered by sophisticated artificial intelligence (AI) and machine learning models that examine the flow of cryptocurrency through the blockchain in order to establish the provenance of funds in any crypto wallet.
Customers can submit a cryptocurrency source or destination address to the BitScore API, and the algorithm returns a risk score evaluating the source of funds sent to that address, or if that address has sent funds to other high-risk parties such as known hacks, dark markets, or money laundering services.
The BitScore algorithm looks at several generations of transactions — or hops — in both directions, and then applies a weighting function that captures the proportion of questionable cryptocurrency flowing through the transactions. BitScore currently supports Bitcoin and will add support for Ethereum and ERC20 tokens this summer, and Litecoin and Bitcoin Cash in fall 2018.
“Understanding the provenance of source and destination addresses is imperative for any exchange or payment platform sensitive to regulatory compliance. 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.”