As digital asset payment service providers continue to improve financial compliance on their platforms in a fight against money laundering and fraud, there are still gaps left in the ecosystem to address.
KYC has its limits
KYCs can help ensure platform users are verified, which helps weed out bad actors.
However, knowing your platform users well does not help in building trust in the origin of a transaction depositing funds into a verified user’s wallet.
This can limit the ability to address cross-platform risks.
Financial technology company UPay has announced a partnership with WIDTH, an AI-based compliance and risk decision intelligence platform helping institutions manage financial crime risk.
The partnership will allow UPay to use WIDTH’s on-chain risk screening product, DART, to analyse wallet addresses and transactions, forming the basis for further investigations under UPay’s risk policies.
UPay offers an integrated ecosystem of digital asset services, including digital wallets, payment cards, OTC services, and cross-border settlement and remittance for individuals and businesses.
Understanding transaction history to identify risk factors
Its partnership with the compliance and risk platform WIDTH aims to help reviewers understand the transaction history and risk connections behind flagged wallet addresses and transactions.
“Our aim is to give reviewers more than a risk flag,” said Owen Yang, CEO of UPay.
“We want them to understand what triggered it and see the transaction history behind it, so they can decide what needs further investigation.”
DART’s wallet address risk screening (KYA) and transaction risk screening (KYT) can be used to assess an address’s risk characteristics and links to high-risk entities, which helps in investigating the sources and destinations of transaction funds.
By using DART, each result can be traced to its score, matched rules, and transaction paths.
Reviewers then use that information to understand risk flags when conducting a manual review and further investigations under UPay’s own risk policies.
“Our focus is on making risk findings useful to the people reviewing them,” said Chionh Chye Kit, Co-Founder & CEO of WIDTH.
“Scores, matched rules and transaction paths help explain why an address or transaction needs attention.”
UPay and WIDTH said they plan to define DART’s scope for various products and service regions for different applications and use cases, across supported assets, blockchain networks, and business arrangements. Evaluation will be based on feedback from actual use.
According to UPay, DART’s analysis will be used to supplement its own risk review process, rather than replace it.
UPay’s own customer due diligence, independent review, business decisions, or applicable regulatory obligations remain the core of the process.
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