Money 20/20: How blockchain analytics can be built into a business model

by the Crystal marketing team

September 5, 2022

Marina Khaustova talks to Finextra about meaningful data visualization  

What can we expect in the area of crypto space regulation, and what are we facing in the coming years – Marina Khaustova, Crystal Blockchain CEO, discusses and shares in an interview with Finextra @ Money 20/20

HW: Tell us about Crystal Blockchain!

MK: Crystal Blockchain is a blockchain analytics company. We are based in Amsterdam. We also have offices in Amsterdam, London & Kyiv, delivering compliance and investigative solutions for digital assets. Those are being used for financial institutions around the world.

HW: How do you think the crypto space can become more AML compliant, and do you think we’re seeing an eagerness within the community to do so?   

MK: The crypto space is evolving fast, and we already see a problem where regulators are trying to catch up with what’s happening. But crypto space should be at the forefront of these efforts.  

They should make additional efforts to educate their compliance teams on bringing their attention to what’s happening and the latest industry developments. I will be speaking about this later today on the stage.  

What trends in money laundering are happening now? What do we expect to see in the upcoming years? Compliance teams worldwide must be prepared. And that helps companies maintain their ML policies in shape.  

While some companies may not be super happy about additional tightening regulations, new rules employed, etc. Everyone is united in their desire to protect their business and the industry from the bad actors.  

Because we see that the interest in digital assets correlates with the rise of the activity of various hackers, and people who initiate security breaches are those who try to launder funds through cryptocurrency exchanges and other financial institutions.  

Those companies, of course, are very interested in protecting this space and ensuring that we are designing a future that is unsuitable for such bad actors.  

HW: Regulation is at the heart of these discussions. So how do you see crypto regulations evolve, and how are we seeing sanctions impact this space?   

MK: This year, we see enormous activity happening at various levels, on a global level and in the local territories and countries that stepped into this area a while ago.  

We see that regulations are being applied and changed and become much tougher on the various levels, from the top level to local countries that actually stepped into digital assets and adopted digital assets a while ago. For example, Financial Task Force has been releasing their guidance for digital assets for several years now in a row.  

Every year they made it much more precise, much more definitive. They were trying to normalize the approach that financial institutions and compliance teams should take towards cryptocurrencies with their approach to traditional finance.  

But for example, this year, FATF says that a considerable number of the FATF members did not apply this guidance to the expected extent. And that is not only concerning particular policies that need to be adopted by these companies, but also for new developments like Travel Rule.  

They warn everyone that they will be much stricter in the upcoming years. On the global level, we, of course, see much more attention directed toward cryptocurrencies. On the local level, some countries and governments are becoming much friendlier, but not even for all the audiences they might see.  

A recent proposal in the United States says that there should not be any tax on transactions less than $200, for example, which is a tremendous step towards the mass adoption of cryptocurrency. Cryptocurrency may become mainstream in these areas, so that’s a huge advancement.  

Along with that, there are discussions about special treatment and risk assessment for noncustodial wallets, etc. So again, it’s a little bit uneven, and it’s happening quite fast now. Sanctions add to this process, and primarily due to the Russian-Ukrainian war, we see a lot of effort applied for sanctioned entities to take out the funds through cryptocurrencies.  

Sanctioned lists are getting updated now with the cryptocurrency addresses as well. With tools like Crystal Blockchain, you can watch how funds related to certain entities move across the chain.  

In general, sanctions speed up the developments, and it’s easier to track sanctioned entities rather than stolen funds laundered through particular tools and services. 

Watch the full Finextra interview at Money 20/20 here  

HW: How can blockchain analytics be implemented into those business models, and what does this space hold

MK: Blockchain analytics can be applied to many business models simultaneously. We look at all the transactions listed within the blockchain ledger, and of course, the blockchain was designed to be transparent and immutable.  

And if you look at this data ledger, you would see a lot of transactions and a lot of associated data – this is what we call the primordial soup of data. You can’t make much sense of it unless you apply specific optics, but you can make many conclusions and actionable insights when you do.  

Compliance is the first application of such data visualization. It’s possible to understand who you’re dealing with, your customers and users, and how the funds change owners in real-time. There are also other useful applications, the investigation being one.  

Security companies are very interested in helping people and entities who fell victim to security breaches or ransomware attacks. And, of course, that is also an essential part of the space.  

This sort of data visualization gives you a lot of insight on the business level, like observing how your users interact with other counterparties and how their assets are moved across the chain.  

That might help financial institutions make their business models budget more precise and have additional input and information to act upon

To combat the emerging threats and to prepare for emerging risks, both jurisdictions and industry, the opportunities of blockchain analytics become crucial to help trace ransomware-related money laundering.  

Our Regulatory & Compliance team at Crystal Blockchain comprises experts from financial services and regulators. We are hands-on professionals with experience in helping you to transform regulation into effective risk management.  

For any questions on crypto compliance regulation, please get in touch with our regulatory affairs team at:   

Watch the full interview on YouTube 

About Crystal: 

Crystal Blockchain continues to expand and offers industry best-in-class analytics solutions. Crystal analyzes and monitors 98% of blockchain transactions up to 100,000 hops. Our real-time data brings clarity and accuracy to aid in mitigating risk and compliant-driven decisions.  

We rank risks and notify you of potentially irregular activities. We assist with investigations, audits, and research reports. We observe changes in regional and global regulations to ensure compliance.  

We support transparency in transactions as we work for a better and safer blockchain future.  

Get in touch at  

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