Encyclopedia

4 A B C D E F G H I J K L M N O P R S T U W

Central Bank Digital Currency (CBDC)

A Central Bank Digital Currency is a blockchain-based fiat currency issued by a central bank. CBDCs seek to leverage blockchain’s immutability, transaction speeds and costs with a country’s fiat currency for a more accountable and efficient system.

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Clustering Algorithms

Clustering algorithms are used to identify blockchain addresses belonging to the same owner by analytical means. Good clustering algorithms can identify hundreds of thousands of suspect’s blockchain addresses just based on one address confirmed as belonging to the suspect. This includes the determination of suspects’ addresses on different blockchain networks. In most cases clustering analysis gives the level

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Combatting the Financing of Terrorism (CFT)

Combatting the Financing of Terrorism or ‘CFT’ are a set of procedures deployed by obliged entities to ensure that the financial system and intermediaries are not used to facilitate the funding of terrorist acts and groups. Terrorist groups need funding to recruit and support members, plan operations and have a logistics hub. By having proper

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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.

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Crypto Asset Tracking

What is crypto asset tracking Crypto asset tracking means the identification and evidencing the destination or source of crypto assets through the application of forensic accounting methods. Defrauded cryptocurrency funds are typically passed through complex layering/mixing schemes to conceal the trail of funds. Each asset tracking exercise starts with the provision of transfers to be

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Cryptocurrency Exchange

Is a website service, or an entity, engaged as a business in the exchange of virtual currency for real currency, funds, or other forms of virtual currency and also precious metals, and vice versa, for a fee (commission). Exchangers generally accept a wide range of payments, including cash, wire payments, credit cards, and other virtual

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Cryptocurrency Forks

What is a fork in cryptocurrency? In digital currencies, a “fork” signifies an alteration to the software underpinning a cryptocurrency, leading to two separate versions of the blockchain. Despite this schism, the two versions share a common historical foundation. The consequential outcome is the birth of a new digital currency, the forked version. This phenomenon

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Custodians

Understanding custodians in traditional finance Wondering what are custodians? A custodian, within the domain of traditional finance, is a financial services provider, often a large bank or financial institution, tasked with holding and safeguarding assets on behalf of clients. This role extends to keeping customers’ securities, cash, bonds, stock and other financial instruments, in electronic

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Customer Due Diligence (CDD)

Customer Due Diligence or ‘CDD’ is a process to assess all of the risks associated with a client or relationship, including KYC, and that requires that the overall client conduct, and transactions are assessed to determine if this is unusual and reportable. CDD requires that obliged entities assess the risks before entering into a relationship,

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