Transaction Monitoring

In most jurisdictions around the world, fintech and crypto businesses are subject to strict anti-money laundering (“AML”) and sanctions monitoring and reporting regulations to battle battle shared threats such as terrorism financing, arms trading, human trafficking and corruption. The goal is to prevent online platforms from being used during the commission of a financial crime - particularly to make it look like that proceeds from a crime upstream are legitimate or from being used by sanctioned entities.

Sardine enables you to perform both an initial screening and an ongoing daily OFAC Sanctions, PEP, and Adverse Media screening, ensuring screening on both existing and new customers.

In order to catch such movements of funds and report to the authorities, businesses are often required to implement an automated and scalable transaction monitoring system.

Transaction monitoring includes creating behavioral profiles of customers based on their historical transaction (i.e. deposits, inter-account or peer-to-peer transfers, withdrawals) history and interactions with an online platform, and comparing that profile to known money laundering typologies (e.g. placement, layering, integration). This usually also includes an assessment of whether a certain transaction was anomalous with respect to the historical behavioral baseline of the customer, customer cohort or an online business. For example, if a customer, whose historical average transaction amount is $100 per week, suddenly starts depositing$10,000 per week, this can be flagged as a potentially suspicious case.

Any business at risk of helping money laundering must ensure it meets the legal requirements imposed by authorities. When it comes to the thresholds at which transactions must be monitored, they are set by various national regulators.

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Next Steps

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