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How AI-Powered Compliance for Crypto Exchanges Provides Security and Customer Trust

This is a continuation of CUBE3’s Use Case Series. In this article, we highlight specific benefits for crypto exchanges looking to automate and optimize their compliance protection and token listing confidence using AI.

Exchanges need to ensure they are not handling illicit funds and the addresses interacting with their platform are not high risk. As a regulated entity, exchanges adeptly use compliance software that flag known sanctioned addresses involved in money laundering and terror financing. However, criminals are washing dirty funds faster than compliance providers can tag and establish attribution in order to freeze accounts. The industry is ramping up, but comprehensive compliance is a challenging target without the fastest and most accurate tools.

Speed to attribution is critical, but frequently the processes for stopping bad actors requires manual review. Multiple exchanges have processed stolen funds before they became aware of the illicit activity. For example, this year the hack of Ripple’s co-founder flooded exchanges with over $100 million in stolen funds. Last week, an account associated with Blackrock’s investment fund BUIDL was dusted by a Tornado Cash account. Without immediate attribution, broader detection and blocking, it’s clear that all types of regulated entities are exposed.

CUBE3’s AI-powered speed to attribution detection coverage is a system that can be used in parallel with existing compliance solutions to better protect crypto exchanges from bad actors.

Here’s how:

Comprehensive Compliance Risk Assessment

  • CUBE3 goes beyond tagging risky contract addresses known to be involved in laundering, terror financing and violating sanctions. In order to protect exchanges and their customers, CUBE3 covers illicit funds originating from smart contract exploits, rug pulls, phishing scams, Ponzi schemes, etc. If you are operating in a regulated space, you must have immediate awareness of what funds are flowing through your business from a broad range of criminal origins.

Real-Time Threat Detection

  • CUBE3 is a dynamic risk scoring system tracks four critical areas: cybersecurity, fraud, and compliance risk. This allows exchanges to proactively identify emerging threats. By not only protecting from malicious addresses, exchanges can also avoid listing tokens poised for rug pulls, among other disasters.

Automated Token Due Diligence

  • CUBE3’s AI models analyze historical and real-time transaction data across multiple blockchains, including Ethereum, Polygon, Avalanche, Arbitrum, and BNB. This comprehensive intelligence provides a data-driven assessment of token activity, revealing hidden risks and uncovering potential red flags.

Streamlined Workflows and Controls

  • CUBE3’s flexible tools — Inspect, Monitor, and Block — empower you to tailor security and compliance based on your needs. Set transaction limits, implement approval workflows, and automate risk-based decisions, reducing manual workload and streamlining operations.

Customizable Integration and Control

  • Exchanges integrate CUBE3’s Risk Score API into their existing platform to seamlessly enforce security policies within their own application. This enables exchanges to maintain control and flexibility while leveraging CUBE3’s powerful AI intelligence.

CUBE3.AI is a complimentary safeguard for those already working with a compliance provider to combat emerging risks. CUBE3’s ML models continuously learn and adapt protecting businesses in evolving regulatory landscapes. Go on the offensive with AI compliance for crypto to proactively address regulatory requirements and maintain a secure, trustworthy exchange. Optimizing security operations reduces manual workload and streamlines security workflows with automated monitoring and proactive controls. The results allow your team to allocate resources efficiently and focus on strategic initiatives like the most impactful token listings.

Listing tokens with confidence is a data-driven decision. To avoid costly mistakes and protect your users from bad actors, CUBE3’s risk assessment and real-time threat detection is another benefit that can enhance user trust. Demonstrate your commitment to security and responsible listings and protect your reputation. Building user trust attracts new token partnerships for exchanges.

Don’t let manual processes and hidden risks compromise your exchange’s success. Embrace the power of AI-powered security with CUBE3. Make confident listing decisions, ensure ongoing token security, and build a reputation for trust, compliance, and innovation in the dynamic world of crypto.

Ready to transform your compliance and token listing and security operations? Book a demo with CUBE3 today and experience the future of crypto exchange security.

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