Banks that are offering crypto support services will now be able to use a compliance tool, launched by the leading blockchain analytics firm, CipherTrace. 

As per the official tweet by CipherTrace, their research marked that US banks process $2 billion in crypto transactions that go undetected. The new crypto compliance product dubbed “Armada” will enable banks and financial institutions that support crypto transactions in “achieving AML compliance”. However, the official announcement shared on April 29 also notes that the tool will help remove risky cryptocurrency blind spots during crypto compliance and encourage a greater degree of transparency. 

Famously known for its crypto tracking and compliance solutions, CipherTrace is helping financial institutions track “suspicious crypto transactions".

As per the finding, consumers or small businesses of top 10 US retail banks transact twitch crypto converters whereas 8 out of top 10 US banks “unknowingly entertain unregistered crypto MSBs." Furthermore, 55% of the top 500 VASPs lack good KYC.

CipherTrace’s Armada isn’t the only tool with these features, rather the market has several such products. However, CipherTrace’s Armada depends on the “off-chain data” to help banks meet stringent compliance standards. More so, the tool works with the bank’s existing physical and monitoring tools to identify both types of transactions, those associated with the virtual asset service providers (VASPs) and those that have weak KYC or running as unregistered money service businesses (MSBs). 

As per the chief financial analyst for CipherTrace, John Jefferies told that his product is a big differentiator from competitors: 

“CipherTrace has the most accurate data attribution coverage tying real-world entities to crypto addresses, enabling Armada to link banking data and billing descriptors to entities, which is a big differentiator from competitors because it is critical for transaction matching.” 

In addition, the tool features 500 businesses involved in VC trading and identifies "high-risk virtual payments” which according to Jefferies include, known criminal activities and thefts, sanctioned entities, higher risk exchanges, malware, HYIP scams, ransomware, and mixers. 

It’s worth noting that the company is backed by top Virtual firms and industry’s top names including Mike Novogratz’s Galaxy Digital. On the other hand, crypto proponents Andreas Antonopoulos claimed that the company like CipherTrace assists "<...> the world’s worst dictator and remixes, either directly or indirectly, with information that violates the civil rights of millions of people. In view of Jefferies, CipherTrace is working to prevent dictator and oppressive regimes from continuing to fund weapons programs and other destructive enterprises”. 

Considering the concern of Antonopoulos and the availability of similar products, what’s your take on the success ratio of CipherTrace’s Armada?