The growing pool of digital asset-savvy investors is an attractive business opportunity for many in financial services: demand for wealth management services and diversification - be it into assets such as art, wine, or property - is on the increase. But that opportunity brings with it challenges.
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Part of the answer lies in blockchain analytics. Using the right tools and data can help you gather the relevant information on a prospect’s digital assets: their sources and destinations of funds, high-risk transactions, and known counterparties. Another is finding the right analytics partner who can help to reconstruct the client’s narrative, decipher some of the complexity, and make sense of their crypto journey.
Here are a few things to consider:
On / Off-Ramp Venues: **knowing how your client began their journey is a critical starting point. The venues which enable purchases of crypto with fiat currency are often referred to as “on-ramps”. Data from on-ramps will give you insight on fiat deposits and withdrawals, and highlight which assets were traded from (and to) fiat. Understanding the fiat in-flows creates the basis for analysing subsequent trading. 1. Non-Custodial Wallets: Has the client used non-custodial wallets for cold storage or to access decentralised finance (DeFi)? Knowing these will make it far easier to map out a client’s ecosystem and assets. Most non-custodial wallets will not be tagged in blockchain analytics platforms, so asking that question up front will make the analysis far quicker. 2. Airdrop Red Flags: Any wallet that is big enough to attract attention will have received unsolicited airdrops from low-profile token projects – some have malicious exploits; others are dropped to artificially widen the holder base. Most suspicious tokens are flagged on public explorers, but this does not necessarily indicate heightened risks to the recipients of such tokens. There is nothing the recipients can do to stop these airdrops, and the presence of these may just be false positive red flags.
As shown above, there is often a significant amount of data to digest, which can be overwhelming even to someone well-trained in due diligence or compliance.
We also know from experience that putting the right steps in place can shave days if not weeks off onboarding time without compromising on quality.
Hoptrail has partnered with Raion Labs to empower businesses to onboard the next generation of crypto wealth across Asia._
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