Huobi’s Star Atlas analytics tool will detect fraud and money laundering

Digital currency exchange giant Huobi Group has launched an analytics tool that will detect illicit transactions on the blockchain. Known as Star Atlas, the new proprietary tool will monitor on-chain digital currency transactions for illicit activities. It will allow the exchange to expand its security measures and curb the use of digital currencies for criminal activities.

As regulators have become more involved in the digital currency industries, blockchain analysis tools have become essential for exchanges. This has led to the rise of firms like Chainalysis and Elliptic whose tools are relied on by exchanges and regulators alike. These tools have drastically reduced the use of digital currencies for illicit activities and made the industry more compliant. Huobi’s new tool will continue with this fight, with the exchange stating, “The launch of Star Atlas underscores Huobi’s efforts to expand its security measures beyond local requirements and contribute to the fight against nefarious uses of cryptocurrencies on a global scale.”

Star Atlas will monitor and analyze on-chain digital currency activities in real-time, identifying and flagging off suspicious or problematic transactions for the Huobi staff to dig deeper into. Some of the techniques it will use include “monitoring on-chain flow of assets, event correlation analysis, identity authentication, and malicious address labeling, to single out and track illicit activities.” The tool will also come with a visual user interface, allowing the Huobi staff to easily trace the transaction paths of activities they deem illicit.

Additionally, the tool will attach millions of tags to transactions and maintain a large library with tens of thousands of blacklisted addresses. It will update this library automatically to “more efficiently detect malicious accounts and even dark web transactions among numerous complex transactions.”

Ciara Sun, VP of Global Business at Huobi Group remarked, “It’s estimated that only a small percentage of cryptocurrency transactions are illicit, but any incident—regardless of size—is a stain on the entire industry. As one of the most active crypto exchanges on the market, we see it as our responsibility to take a leading role in preventing the minority of bad actors from ruining it for the vast majority that follows the rules.”

Huobi’s new tool comes at a crucial time for the exchange as it braces itself for the U.S. market, one that’s very stringent on AML and CTF measures. Huobi revealed recently that it had partnered with a U.S. licensed firm and that it could launch this month. It has previously made a stab at the U.S. market with Huobi U.S., which shut down a few months back. This time, the exchange will operate “as Huobi Group and there will not be a separate legal entity like Huobi US anymore,” Sun told CoinDesk recently.

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