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Elliptic Publishes New Research on AI and Money Laundering

AI Research | May 31, 2024

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Elliptic's new AI research advances blockchain analytics, enhancing risk detection and transaction analysis

Elliptic, in collaboration with the MIT-IBM Watson AI Lab, has unveiled updated research showcasing the potential of AI in enhancing blockchain analytics, and more specifically using AI to detect money laundering in crypto markets. The study uses deep learning models to identify money laundering activities, using the extensive Elliptic2 dataset comprising over 200 million transactions. This approach not only detects known laundering patterns but also uncovers new, previously undetectable illicit activities.

Instead of concentrating on finding specific unlawful wallets, Elliptic's AI models identify "subgraphs," which are collections of transactions that indicate laundering operations. A more thorough and precise detection of money laundering is possible with this approach. The AI model used in the study demonstrated remarkable performance measures, such as an F1 score of 0.933 and a ROC-AUC of 0.889. The model's effectiveness was validated through practical testing with a cryptocurrency exchange, which correctly detected 14 out of 52 flagged subgraphs as potentially related to money laundering.

See:  FINTRAC Guidance on Bitcoin ATMs and Money Laundering

Elliptic has made the Elliptic2 dataset publicly available in addition to its technical accomplishments in order to promote additional study and advancement in the area. By encouraging cooperation and creativity, this openness hopes to improve the identification of illegal cryptocurrency activity.  Read the full research paper here.

Final Thought

The creative application of AI in blockchain analytics by Elliptic's new research is a major advancement in the battle against financial crime. Through the utilization of vast datasets and sophisticated artificial intelligence methodologies, this study improves the security and transparency of blockchain transactions.

NCFA Jan 2018 resize - Elliptic Publishes New Research on AI and Money LaunderingThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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