What is AML?
AML (Anti-Money Laundering) is a set of measures designed to prevent the laundering of proceeds of crime. The aim is to stop cryptocurrencies and other financial instruments being used for money laundering, terrorist financing or evading sanctions.
AML includes:
- detecting suspicious transactions;
- tracking the provenance of assets;
- analysing the behaviour of users and their counterparties;
- identifying links to high-risk services (darknet marketplaces, mixers, sanctioned addresses).
In the crypto industry, specialist firms handle AML transaction analysis: Chainalysis, Crystal, Elliptic, BitOK and others. Exchanges, swapping services, crypto companies and law-enforcement agencies use their data to freeze and return digital assets to their rightful owners.
Retail users can turn to AML tools from companies such as BitOK to minimise the risks of interacting with high-risk services and suspicious transactions.
What is BitOK?
BitOK is a company that offers individuals and businesses solutions to check digital assets for links to illicit activity.
Its ecosystem includes:
- BitOK AML bot — a Telegram bot for quick checks of addresses and transactions;
- “Portfolio tracker” — a web interface for tracking crypto assets and analysing transaction history;
- KYT Office — a corporate solution with an API for analysing and monitoring transactional activity;
- AML certification — courses and training on investigating crypto-related crimes and obtaining the “AML officer” qualification. Classes are held in a hybrid format with company staff and guest experts.
The BitOK team also conducts investigations and helps trace and recover cryptoassets: it visualises transactions, prepares expert reports and collaborates with crypto exchanges.
Who created BitOK, and when?
The company was founded in 2021 by Dmitry Machikhin, who serves as CEO. Developers and AML experts from the United States and Israel took part in building the service.
“Illegality and anonymity of cryptocurrencies are a myth. We seek to make the market transparent for all participants, and with modern data-analytics algorithms and AI we achieve high-quality transaction monitoring. Our solutions are used by traders, exchanges and banks around the world,” — the company says.
Machikhin is also a UN guest expert on the implementation of AML/CFT standards in the crypto market. He has repeatedly provided ForkLog with expert commentary on anti-money-laundering and the crypto industry’s interaction with traditional finance.
How to run an AML check with BitOK
The service analyses wallets both manually and automatically.
The BitOK Telegram bot lets you quickly check an address or transaction ID (hash). Simply send them in the chat. The bot analyses the data and returns a report that includes:
- the address’s risk level;
- links to illicit activity;
- information about counterparties and sources of funds.
This tool helps users rapidly assess the “cleanliness” of funds right in the messenger.
More detailed AML analysis and transaction accounting are available in the anonymous “Portfolio tracker”. It aggregates and visualises data from all of a user’s accounts, classifies transactions, and lets users add notes and generate tax reports and other documents.
For businesses, BitOK offers a separate product — KYT Office. It integrates via API and automatically checks all incoming and outgoing transactions. The system allows filters and responses to suspicious activity to be configured.
KYT Office includes automatic alerts for higher-risk transactions and flexible risk-profile settings.
Like the Portfolio tracker, KYT Office keeps an audit trail of checks and generates reports for compliance, regulators and internal audit.
“Automating AML with KYT Office reduces the risks of funds being frozen on exchanges, ensures compliance with international AML/CFT standards and regulatory requirements, and boosts trust from clients and partners,” BitOK emphasises.
What investigations does BitOK undertake?
Over four years, the BitOK team has carried out several public investigations. The best known include:
- the Bitmana case — analysis of a $150m crypto theft;
- the Tambiev case — an investigation into how a Moscow investigator received a “bitcoin bribe” from members of the hacker group Infraud Organization;
- the Lazarus case — an examination of how North Korean hackers launder cryptocurrency via cross-chain bridges and mixers.
The company has also helped investigate the financing schemes of the terrorist groups Hamas and Hezbollah.
“In a number of cases, BitOK’s materials were used in international investigations, and some conclusions — for obvious reasons — were never made public in the media,” notes Dmitry Machikhin.