On 1st February 2021, Alaco Analytics launched EDDie, a crypto-focused AML platform designed to help VASPs and financial institutions assess counterparty risk in the cryptocurrency space.
What is EDDie?
EDDie is a technology-driven platform which allows users to run automated Anti-Money Laundering and Source of Funds checks on their customers and their customer’s Bitcoin funds. It is a one-stop shop, built to help crypto businesses meet their regulatory obligations and to protect against reputational risks. It is the first platform of its kind to allow users to run customer and crypto funds checks instantly and simultaneously.
What information does EDDie generate?
EDDie comprises two main parts:
- ‘AML-Sanctions Reports’, where a user can generate AML data on an individual. AML report include the following categories:
- Politically Exposed Persons
- Law Enforcement Watchlists
- Criminal Litigation
- Adverse Media
- Regulatory watchlists
- ‘Know-Your-Address Reports’, where a user can generate KYA data on an individual’s or an entity’s Bitcoin address. These reports include:
- The source and destination of Bitcoin funds
- The identity of high-risk counterparties and events
- High-value transactions
- Regulatory data on known wallet entities
Why did we create EDDie?
The AML and KYA reporting functions on EDDie have been designed to meet, and in some cases exceed, regulatory requirements set out under the EU’s Fifth Anti-Money Laundering Directive (“5AMLD”) for Virtual Asset Service Providers (VASPs), and the FCA’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations (“MLR”) 2017.
As set out in Part 3, Chapter 1 of the FCA’s 2017 MLR legislation, a VASP must conduct certain checks on their customers “in any case identified as one where there is a high risk of money laundering or terrorist financing”. Such checks include, but are not limited to, whether a customer is a politically exposed person, whether they are subject to sanctions, embargos, or similar measures, or whether they are involved in (or exposed to) serious financial crime issues.
EU and UK AML legislation also requires that a VASP undertakes ongoing monitoring of all customers to ensure that transactions are consistent with the business’ knowledge of the customer, the customer’s business and risk profile. In additional to enhanced integrity screening, this can be interpreted to mean source of funds monitoring on a customer’s cryptocurrency to ensure that any illicit or suspicious activity can be flagged in a timely manner.
EDDie was created by Alaco Analytics to meet these very requirements, bridging the gap between traditional due diligence and blockchain analytics.