Counterparty Risk

Counterparty risk is the risk that an entity that is a party to a financial transaction is associated with illicit activity. Bitcoin and cryptocurrency money launderers for example would be benefactors or intermediaries with a high Counterparty Risk Score or ‘C-score’. The criteria that counterparty risk is measured against with proper due diligence is comprehensive. It takes into account sanctioned entities, Politically Exposed Persons or ‘PEPs’, associations with Darknet Markets (DNMs), etc. Coinfirm’s C-score for example takes into account more than 270 risk criteria.

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