A privacy coin or anonymity enhanced coin (AEC) is untraceable on the blockchain and protects users' privacy and anonymity.
We often hear that Bitcoin and other cryptocurrencies are anonymous. But in fact, they are only pseudonymous. Since every transaction is public, anyone can trace what happens on blockchains.
This is the reason why privacy coins or anonymity enhanced coins (AECs) exist. It allows the user to transact anonymously as the origin and destination of the coins are obfuscated (by hiding information or mixing for example). This also makes the coins untraceable on the blockchain via blockchain analytics tools. Some well-known privacy coins are Dash (DASH), Monero (XMR), Zcash (ZEC), or Grin (GRIN).
Users should be cautious when transacting with privacy coins. Indeed, they represent a higher money laundering/terrorism financing risk than other cryptocurrencies. For example, the FATF considers that the use of privacy coins constitutes a key risk indicator.
Scorechain Blockchain Analytics platform supports the Dash blockchain. It enables users to track Dash transactions and assess the level of risk helping them be compliant with regulations worldwide.
Discover more about blockchain analytics, crypto and compliance with our Glossary.
About Scorechain
Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.
Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.
