> ## 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 Levels

> Bitrace AML API uses a four-tier risk classification system to help you quickly assess the risk level of addresses and transactions.

## Risk Level Categories

### 🔴 High Risk

Addresses or transactions with confirmed or highly suspicious risk indicators.

**Characteristics**:

* Direct connections to known illicit activities
* Sanctioned entities or individuals
* Confirmed hacking incidents
* Money laundering patterns
* Darknet marketplace activity

**Recommended Action**: Block or flag for immediate review

### 🟡 Generally High Risk (Medium Risk)

Addresses or transactions with moderate risk indicators that warrant further investigation.

**Characteristics**:

* Indirect connections to risky entities
* Unusual transaction patterns
* High-risk jurisdiction involvement
* Newly emerged suspicious patterns

**Recommended Action**: Enhanced due diligence and monitoring

### 🟢 Low Risk

Addresses or transactions with minimal or no risk indicators detected.

**Characteristics**:

* No direct connections to illicit activities
* Normal transaction patterns
* Established entities or individuals
* Clean blockchain history

**Recommended Action**: Standard monitoring

### ⚪ Whitelist

Addresses that have been verified and confirmed as safe through system-defined sources.

**Characteristics**:

* Addresses from compliant centralized exchanges
* Institutional addresses with verified compliance
* Well-known compliant funds
* System-verified trusted entities

**Recommended Action**: Standard monitoring

## Risk Scoring Algorithm

Our risk scoring engine considers multiple factors:

### Direct Risk Factors

* Known blacklist matches
* Sanctions list matches
* Confirmed scam reports
* Law enforcement reports

### Behavioral Risk Factors

* Transaction volume patterns
* Counterparty connections
* Jurisdiction risk
* Entity type risk

### Network Risk Factors

* Proximity to high-risk addresses
* Chain analysis results
* Fund flow patterns
* Time-based patterns

## Risk Level in API Responses

Risk levels appear in various API responses:

### KYA Risk Assessment

```json theme={null}
{
  "success":true,
  "code":1,
  "msg":"SUCCESS",
  "data":{
    "time":1726107623669,
    "address":"13mnk8SvDGqsQTHbiGiHBXqtaQCUKfcsnP",
    "network":"btc",
    "whitelist": false,
    "risks":[
      {
        "riskLevel":"high",
        "riskType":"sanction",
        "riskSource":"Bitrace"
      }
    ]
  }
}
```

### KYT Transaction Screening

```json theme={null}
{
  "success":true,
  "code":1,
  "msg":"SUCCESS",
  "data":{
    "risks":[
      {
        "riskLevel":"low",
        "riskType":"scam"
      },
      {
        "riskLevel":"high",
        "riskType":"online-gambling"
      },
      {
        "riskLevel":"generally-high",
        "riskType":"launder-money"
      }
    ],
    "externalId":"87111618424664721806777127547213",
    "resultTime":1723542989406,
    "analyseStatus":true,
    "hash":"0xddeb5d1e29a88ac9e0a304f415628ff45f53c7278127de7f47c75b43bebcce8f",
    "value":1902.31608,
    "blockTime":1718669807000,
    "address":"0x974caa59e49682cda0ad2bbe82983419a2ecc400"
  }
}
```

### Risk Scores

Some endpoints provide numerical risk scores (0-100):

```json theme={null}
{
  "success":true,
  "code":1,
  "msg":"SUCCESS",
  "data":{
    "scores":[
      {
        "address":"TFskN28dBDqv8tLKtM2GwroGx7bKDUSnBW",
        "score":"92",
        "riskBehavior": [
          {
            "riskType": "scam",
            "percent": "80"
          },
          {
            "riskType": "online-gambling",
            "percent": "5"
          }
        ]
      }
    ],
    "requestId":"26784916292200597542974738410940",
    "customId": "1234567",
    "status":1003
  }
}
```

**Score Ranges**:

* **80-100**: Severe Risk
* **50-79**: High Risk
* **20-49**: Medium
* **0-19**: Low Risk

<Card title="Bitrace Model Score" icon="hexagon-nodes" href="/en/faq/bitrace-model-score">
  More details on Guides
</Card>

## Custom Risk Thresholds

You can implement custom risk thresholds based on your compliance requirements:

```javascript theme={null}
function checkRisk(riskLevel, riskScore) {
  // Custom threshold logic
  if (riskLevel === 'high' || riskScore >= 80) {
    return 'BLOCK';
  } else if (riskLevel === 'generally-high' || riskScore >= 50) {
    return 'REVIEW';
  } else {
    return 'ALLOW';
  }
}
```

## Risk Level Updates

Risk levels are continuously updated as new intelligence emerges:

* **Real-time**: High-priority risks (e.g., new hacks)
* **Daily**: Medium-priority updates
* **Weekly**: Comprehensive risk model updates

## Best Practices

1. **Layered Approach**: Use both risk levels and risk scores for comprehensive assessment
2. **Context Matters**: Consider risk levels alongside business context
3. **Regular Reviews**: Periodically review medium-risk addresses
4. **False Positives**: Report potential false positives to improve accuracy
5. **Compliance Alignment**: Align your risk thresholds with regulatory requirements

## Related Resources

* [Risk Types](/api-reference/resources/risk-types) - Detailed risk category information
* [API Reference](/api-reference/endpoints) - Endpoint documentation
* [Error Codes](/api-reference/resources/error-codes) - Error handling