Japanese blockchain company BUIDL has launched SHIEDL, an anti-money laundering (AML) and counter financing of terrorism (CFT) tool for cryptocurrency exchanges.
SHIEDL is an address risk analysis tool that calculates the risk score of a blockchain address. It is able to analyze addresses from the Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) protocols.
Using machine learning, SHIEDL analyses the flow of transactions from each address and looks for the use of anonymization techniques (e.g. coin mixing services), to calculate the risk score of each address. According to the company, the tool monitors transactions when depositing/withdrawing cryptocurrencies, as well as transactions derived from the addresses of exchanges where cryptocurrencies have been purchased or withdrawn from. The tool informs exchanges when transactions are identified as high risk. Using the tool, addresses believed to be associated with criminal activity can be added to a list of high-risk addresses.
According to BUIDL Vice President Masaharu Uno, "In the virtual currency area, a bad reputation can not be wiped out due to an attack such as hacking by a malicious organization. With this address tracking tool, suspicious transactions can be detected."
The Financial Action Task Force (FATF) published a recommendation in June 2019. It advised over 190 FATF member countries and regions to develop cryptocurrency AML laws quickly. Global regulatory authorities are expected to take a more cautious approach in the future.
BUIDL was founded in 2018. Global Brain, and Omise founder Jun Hasegawa are investors in the company.