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Risk Types

Bitrace AML API detects and categorizes various types of blockchain-related risks. Each risk type corresponds to specific patterns, behaviors, or known entities.

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Risk Categories

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Financial Crimes

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Money Laundering

  • Code: launder-money
  • Description: Addresses involved in layering and obfuscation of illicit funds
  • Risk Level: Usually High
  • Indicators:
    • Rapid fund movement across multiple addresses
    • High transaction volumes with no apparent business purpose
    • Connections to known mixing services

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Ransomware

  • Code: ransomware
  • Description: Addresses associated with ransomware operations or payments
  • Risk Level: High
  • Indicators:
    • Known ransomware wallet addresses
    • Patterns matching ransom payment flows
    • Connections to identified ransomware operators

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Fraud & Scams

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Scam

  • Code: scam
  • Description: Addresses involved in fraudulent schemes or scams
  • Risk Level: High
  • Types:
    • Ponzi schemes
    • Investment scams
    • Phishing operations
    • Fake exchanges or services

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Hack

  • Code: hack
  • Description: Addresses involved in hacking incidents or security breaches
  • Risk Level: High
  • Indicators:
    • Funds from known exchange hacks
    • Exploit-related transactions
    • Smart contract vulnerabilities

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Illicit Activities

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Darknet Market

  • Code: darknet-market
  • Description: Addresses associated with darknet marketplace operations
  • Risk Level: High
  • Indicators:
    • Known darknet market wallets
    • Patterns matching illicit marketplace transactions

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Online Gambling

  • Code: online-gambling
  • Description: Addresses involved in unauthorized online gambling operations
  • Risk Level: Medium to High
  • Note: Consider local regulations for treatment

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Sanctions & Compliance

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Sanctioned Entity

  • Code: sanctioned-entity
  • Description: Addresses owned by sanctioned individuals or entities
  • Risk Level: High
  • Sources:
    • OFAC (US Treasury)
    • EU Sanctions List
    • UN Sanctions List
    • Other international watchlists

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High-Risk Jurisdiction

  • Code: high-risk-jurisdiction
  • Description: Addresses in jurisdictions with weak AML/CFT regulations
  • Risk Level: Medium
  • Considerations:
    • FATF grey/black list countries
    • High-risk geographic areas

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Exchange & Service Risks

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High-Risk Exchange

  • Code: high-risk-exchange
  • Description: Exchanges with poor compliance records or regulatory issues
  • Risk Level: Medium to High
  • Indicators:
    • Lack of KYC procedures
    • Regulatory enforcement actions
    • History of facilitating illicit transactions

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Mixer/Tumbler

  • Code: mixer
  • Description: Addresses associated with coin mixing services
  • Risk Level: High
  • Purpose: Services that obfuscate transaction trails

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Entity-Specific Risks

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Seychelles IBC

  • Code: seychelles-ibc
  • Description: Entities registered as Seychelles International Business Companies
  • Risk Level: Low to Medium
  • Context: While legal, often used for opacity

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Unregistered Casino

  • Code: unregistered-casino
  • Description: Gambling operations without proper licensing
  • Risk Level: Medium

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Risk Type in API Responses

Risk types appear in both KYA and KYT endpoints: 
{
  "data": {
    "risks": [
      {
        "riskLevel": "high",
        "riskType": "sanctioned-entity"
      },
      {
        "riskLevel": "medium",
        "riskType": "high-risk-jurisdiction"
      }
    ]
  }
}

​
Multiple Risk Types

An address or transaction can have multiple risk types: 
{
  "risks": [
    {"riskLevel": "high", "riskType": "hack"},
    {"riskLevel": "high", "riskType": "mixer"},
    {"riskLevel": "medium", "riskType": "exchange"}
  ]
}

​
Handling Different Risk Types

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Compliance Workflows

function handleRisk(risks) {
  const criticalRisks = ['sanctioned-entity', 'ransomware', 'launder-money'];

  for (const risk of risks) {
    if (criticalRisks.includes(risk.riskType)) {
      return 'BLOCK_AND_REPORT';
    }

    if (risk.riskLevel === 'high') {
      return 'BLOCK_AND_REVIEW';
    }
  }

  return 'ALLOW';
}

​
Regulatory Reporting

Different risk types may trigger different reporting requirements:
  • Sanctioned entities: Immediate blocking and reporting
  • Money laundering: SAR filing
  • Fraud: Law enforcement reporting
  • High-risk jurisdictions: Enhanced due diligence

​
Risk Type Evolution

Our risk detection models are continuously updated:
  • New categories added as new threats emerge
  • Refined classifications based on new intelligence
  • Deprecated categories as threats evolve

​
Reporting False Positives

If you believe a risk classification is incorrect:
  1. Document the transaction details
  2. Gather supporting evidence
  3. Submit a report through our support portal
  4. Our team will investigate and update if needed

​
title: Risk Types description: Detailed categories of risk indicators in Bitrace AML API

​
Risk Types

Bitrace AML API detects and categorizes various types of blockchain-related risks. Each risk type corresponds to specific patterns, behaviors, or known entities.

​
Risk Categories

​
Financial Crimes

​
Money Laundering

  • Code: launder-money
  • Description: Addresses involved in layering and obfuscation of illicit funds
  • Risk Level: Usually High
  • Indicators:
    • Rapid fund movement across multiple addresses
    • High transaction volumes with no apparent business purpose
    • Connections to known mixing services

​
Ransomware

  • Code: ransomware
  • Description: Addresses associated with ransomware operations or payments
  • Risk Level: High
  • Indicators:
    • Known ransomware wallet addresses
    • Patterns matching ransom payment flows
    • Connections to identified ransomware operators

​
Fraud & Scams

​
Scam

  • Code: scam
  • Description: Addresses involved in fraudulent schemes or scams
  • Risk Level: High
  • Types:
    • Ponzi schemes
    • Investment scams
    • Phishing operations
    • Fake exchanges or services

​
Hack

  • Code: hack
  • Description: Addresses involved in hacking incidents or security breaches
  • Risk Level: High
  • Indicators:
    • Funds from known exchange hacks
    • Exploit-related transactions
    • Smart contract vulnerabilities

​
Illicit Activities

​
Darknet Market

  • Code: darknet-market
  • Description: Addresses associated with darknet marketplace operations
  • Risk Level: High
  • Indicators:
    • Known darknet market wallets
    • Patterns matching illicit marketplace transactions

​
Online Gambling

  • Code: online-gambling
  • Description: Addresses involved in unauthorized online gambling operations
  • Risk Level: Medium to High
  • Note: Consider local regulations for treatment

​
Sanctions & Compliance

​
Sanctioned Entity

  • Code: sanctioned-entity
  • Description: Addresses owned by sanctioned individuals or entities
  • Risk Level: High
  • Sources:
    • OFAC (US Treasury)
    • EU Sanctions List
    • UN Sanctions List
    • Other international watchlists

​
High-Risk Jurisdiction

  • Code: high-risk-jurisdiction
  • Description: Addresses in jurisdictions with weak AML/CFT regulations
  • Risk Level: Medium
  • Considerations:
    • FATF grey/black list countries
    • High-risk geographic areas

​
Exchange & Service Risks

​
High-Risk Exchange

  • Code: high-risk-exchange
  • Description: Exchanges with poor compliance records or regulatory issues
  • Risk Level: Medium to High
  • Indicators:
    • Lack of KYC procedures
    • Regulatory enforcement actions
    • History of facilitating illicit transactions

​
Mixer/Tumbler

  • Code: mixer
  • Description: Addresses associated with coin mixing services
  • Risk Level: High
  • Purpose: Services that obfuscate transaction trails

​
Entity-Specific Risks

​
Seychelles IBC

  • Code: seychelles-ibc
  • Description: Entities registered as Seychelles International Business Companies
  • Risk Level: Low to Medium
  • Context: While legal, often used for opacity

​
Unregistered Casino

  • Code: unregistered-casino
  • Description: Gambling operations without proper licensing
  • Risk Level: Medium

​
Risk Type in API Responses

Risk types appear in both KYA and KYT endpoints: 
{
  "data": {
    "risks": [
      {
        "riskLevel": "high",
        "riskType": "sanctioned-entity"
      },
      {
        "riskLevel": "medium",
        "riskType": "high-risk-jurisdiction"
      }
    ]
  }
}

​
Multiple Risk Types

An address or transaction can have multiple risk types: 
{
  "risks": [
    {"riskLevel": "high", "riskType": "hack"},
    {"riskLevel": "high", "riskType": "mixer"},
    {"riskLevel": "medium", "riskType": "exchange"}
  ]
}

​
Handling Different Risk Types

​
Compliance Workflows

function handleRisk(risks) {
  const criticalRisks = ['sanctioned-entity', 'ransomware', 'launder-money'];

  for (const risk of risks) {
    if (criticalRisks.includes(risk.riskType)) {
      return 'BLOCK_AND_REPORT';
    }

    if (risk.riskLevel === 'high') {
      return 'BLOCK_AND_REVIEW';
    }
  }

  return 'ALLOW';
}

​
Regulatory Reporting

Different risk types may trigger different reporting requirements:
  • Sanctioned entities: Immediate blocking and reporting
  • Money laundering: SAR filing
  • Fraud: Law enforcement reporting
  • High-risk jurisdictions: Enhanced due diligence

​
Risk Type Evolution

Our risk detection models are continuously updated:
  • New categories added as new threats emerge
  • Refined classifications based on new intelligence
  • Deprecated categories as threats evolve

​
Reporting False Positives

If you believe a risk classification is incorrect:
  1. Document the transaction details
  2. Gather supporting evidence
  3. Submit a report through our support portal
  4. Our team will investigate and update if needed