5 CHALLENGES FOR TRANSACTION MONITORING FOR CRYPTOCURRENCY EXCHANGES

To identify and stop fraud, money laundering, and other illegal activities, transaction monitoring is a vital process. Transaction monitoring does face a number of significant difficulties, such as:.

High Transaction Volume: Due to the volume of transactions that Crypto Exchanges face each day, it is challenging to effectively monitor each transaction. It is challenging to manually identify suspicious transactions because of the high transaction volume.

False Positives: A high percentage of false positives are produced by transaction monitoring systems, making it time- and money-consuming to investigate them. When legitimate transactions are mistakenly marked as suspicious, unnecessary investigations are launched.

Complex Transactions: Due to the introduction of new financial products like Cryptocurrencies, transactions have grown more complicated, making it difficult to monitor and identify shady activity.

Lack of Skilled Personnel: Effective management and monitoring of transaction monitoring systems requires specialized knowledge and skills, which are in short supply.

Cost: Setting up and keeping a transaction monitoring system can be expensive, particularly for small startups that may not have the funds to invest in complex systems.

In order to overcome these challenges Cryptocurrency Exchanges can invest in modern but not sophisticated transaction monitoring systems that can handle large volumes of transactions, make use of analytics tools and artificial intelligence, and incorporate contextual data to minimize false positives.

Reporting Entities also, have to make sure they have the qualified staff on hand to manage and keep an eye on the transaction monitoring systems efficiently.

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