> ## Documentation Index
> Fetch the complete documentation index at: https://docs.bitrace.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Risk Types

> 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:

```json theme={null}
{
  "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:

```json theme={null}
{
  "risks": [
    {"riskLevel": "high", "riskType": "hack"},
    {"riskLevel": "high", "riskType": "mixer"},
    {"riskLevel": "medium", "riskType": "exchange"}
  ]
}
```

## Handling Different Risk Types

### Compliance Workflows

```javascript theme={null}
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

## Related Resources

* [Risk Levels](/resources/risk-levels) - Risk severity classifications
* [Supported Chains](/resources/supported-chains) - Network coverage
* [API Reference](/api-reference) - Endpoint documentation

***

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:

```json theme={null}
{
  "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:

```json theme={null}
{
  "risks": [
    {"riskLevel": "high", "riskType": "hack"},
    {"riskLevel": "high", "riskType": "mixer"},
    {"riskLevel": "medium", "riskType": "exchange"}
  ]
}
```

## Handling Different Risk Types

### Compliance Workflows

```javascript theme={null}
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

## Related Resources

* [Risk Levels](/resources/risk-levels) - Risk severity classifications
* [Supported Chains](/resources/supported-chains) - Network coverage
* [API Reference](/api-reference) - Endpoint documentation