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AI-based Crypto Transactions Monitoring

AI-based Crypto Transactions Monitoring analyzes all addresses interacting with SmartCredit.io. Addresses with high fraud scores are excluded from transactions.

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Key Takeaways

  • SmartCredit.io integrates an AI-based Crypto Fraud Score from ChainAware.ai to monitor every wallet address that connects to the platform.
  • Addresses with a high fraud probability score are automatically excluded from all platform transactions - loan requests, Fixed Income Fund matching, staking rewards, and fiat on-ramp/off-ramp.
  • Monitoring is continuous and real-time: each transaction request triggers a fresh fraud score check before processing.
  • This AML compliance layer operates without requiring KYC paperwork from users: risk assessment is based on on-chain transaction history analysis.
  • The same ChainAware Fraud Score API is available to other DeFi platforms at swagger.chainaware.ai.

SmartCredit.io uses an AI-based Crypto Fraud Score for continuous transaction monitoring to exclude high-risk addresses from participating in the platform. The service is provided by ChainAware.ai.

How it works

Every wallet address that connects to SmartCredit.io is automatically analyzed by the ChainAware Fraud Score model. The model assesses the address's on-chain transaction history for patterns associated with fraud, money laundering, rug pulls, theft, and sanctions exposure. If the fraud probability exceeds the defined threshold, the address is blocked from all platform activity.

This approach provides AML compliance coverage without interrupting legitimate users: the vast majority of wallets have low fraud scores and experience no disruption.

What gets blocked for flagged addresses

If addresses are flagged, then:

  • Loan requests from the respective addresses are not matched
  • Fixed Income Funds from the respective addresses are not matched
  • Staking rewards are not distributed
  • Fiat on-ramp/off-ramp services are not enabled

All addresses with a high probability of fraud are excluded from business transactions.

Regulatory context

DeFi platforms operating as Virtual Asset Service Providers (VASPs) under FATF guidance and MiCA regulations are required to implement transaction monitoring. SmartCredit.io's integration of AI-based transaction monitoring fulfills this obligation and is consistent with the AML/CFT standards applied to regulated financial institutions. See Crypto Transactions Monitoring for the regulatory background.

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