According to the report released by Elliptic on cross-chain criminal activities,the company created an analytic tool to screen crypto-based as well as Bitcoin transactions in 2014. However, by 2022, there has become a need to create a new generation system.
Legacy blockchain analytics have been used by VASPs (Virtual Asset Service Providers), however, these analytics “do not have the capabilities to trace, screen or forensically investigate transactions across blockchains or tokens,” the report states. As a result, cross-chain transactions have altered the architecture of Web3 activities.
Thus, Elliptic is introducing a Holistic Screening system as a “response to the rapidly changing state of crypto crime.” The new system provides three unique functionalities, the team said:
- Multiasset screening
- Cross-asset tracing
- Cross-chain screening
Funds on decentralized exchanges can be screened
Multi-asset screening will make it possible “to screen wallets across all assets that they have ever contained for incoming and outgoing exposure to risk,” the Elliptic team shared.
This process will offer a unique holistic score for all the tokens linked to any wallet being screened. In the previous system, multiple scores were given for each token screened in a wallet, but the Holistic Screening powered by Elliptic Nexus, gives one score for all tokens single wallet, the Elliptic team added.
Cross-asset tracing is a function that permits tracing the exchange of several “crypto assets on the same exchange,” the Elliptic team explained. Thus, DeFi organizations can “follow funds through decentralized exchanges or other services that swap cryptoassets on the same blockchain.” This process will drastically reduce the time spent in investigating crimes with automated investigation systems.
Lastly, cross-chain tracing enhances tracing “transactions involving the exchange of cryptoassets across different blockchains,” the team said. Bridges, and newer DeFi tools that aid cryptoaasets transactions on several chains can be monitored effectively.
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