Transaction Monitoring¶

What Is DeFi Transaction Monitoring?¶

DeFi transaction monitoring means verifying wallet addresses before they interact with your protocol - preventing fraudulent, sanctioned, or high-risk addresses from connecting, depositing, or executing transactions.

In traditional finance, AI fraud models rely on rich identity data: account histories, device databases, credit card records. In DeFi, the blockchain address is the only data point. ChainAware's AI is purpose-built for this constraint - scoring risk entirely from on-chain behaviour patterns across 20M+ wallet profiles.

AML vs Transaction Monitoring¶

AML and Transaction Monitoring are legally distinct disciplines - but the industry routinely sells one as the other.

AML screening is backward-looking. It checks fund origins against known-bad address lists - a publicly known algorithm that bad actors route around by using clean, unflagged wallets.

Transaction Monitoring is forward-looking. It predicts fraudulent behaviour from on-chain patterns, including fraud carried out with funds that have never touched a blacklisted address.

Regulators require both as separate controls. FATF, MiCA, and FinCEN all mandate Transaction Monitoring independently from AML screening. An estimated 50,000-80,000+ VASPs are legally required to run it - and because the two are so widely conflated, most are not doing so correctly.

How It Works¶

01 - Wallet Connects
The GTM pixel fires on wallet connection. The Transaction Monitoring Agent begins watching that address across every blockchain it is active on - not just the chain the Dapp runs on.

02 - Every Transaction Scored
Each new transaction is scored in real time against ChainAware's behavioral fraud-signature library - the same predictive engine behind the Fraud Detector, run continuously instead of once.

03 - Pattern Match Flagged
A match triggers on forward-looking behavioral similarity to known fraud patterns - not a lookup against a static blacklist. Fraud committed with clean funds is caught the same as fraud from a flagged address.

04 - Compliance Officer Notified
An alert is sent instantly via Telegram or webhook. The officer decides the response - shadow ban, full restriction, or further investigation - with the full behavioral context already assembled.

Always-on coverage: every wallet that has ever connected stays monitored, not just new ones. A clean wallet today can turn fraudulent tomorrow - the Agent is watching when it does.

Zero-engineering integration: deployed through the ChainAware Pixel via Google Tag Manager. Teams already running the Pixel get monitoring at no added integration cost. REST API and webhook alerting are available for custom alerting logic.

Pricing: free tier covers 1,000 transactions/month; enterprise pricing is custom.

Predictive Power¶

The AI-based Fraud Score has 98% predictive accuracy. It is not a forensic algorithm based on known bad address lists - it is a predictive model that identifies behavioural patterns associated with fraud before an incident is recorded anywhere.

Every scam follows behavioural patterns stored in on-chain transaction history. ChainAware's models identify these patterns and forecast future behaviour based on past interaction signatures.

Supported Networks¶

Ethereum, BNB Smart Chain, Polygon, Base, TON, TRON, Haqq, and Solana.

AML and Sanctions Monitoring¶

AML and sanctions screening are fully integrated into both the Wallet Auditor and the Fraud Detector - not bolt-on additions. Every audit and every fraud check automatically runs the following:

Sanctions screening - wallets are checked against OFAC SDN, EU Consolidated Sanctions List, and UN Security Council lists in real time
Darknet and mixer exposure - connections to Tornado Cash and other known mixing services, darknet market addresses, and illicit fund clusters
Layering pattern detection - rapid fund cycling, structuring behaviour, and round-number smurfing consistent with AML typologies
Counterparty network analysis - up to N hops through the transaction graph to surface indirect connections to flagged wallets
Known exploit and hack proceeds - flags wallets that received funds traceable to protocol hacks or exit scams

The AML output is structured for compliance use: each flag includes the specific type of exposure, the hop distance, and a timestamped record suitable for audit log storage.

For individuals: the Wallet Auditor and Fraud Detector show AML flags as part of every free report - no account required.

For DeFi protocols: the same signals are available via the REST API and Prediction MCP, with configurable thresholds for ALLOW / FLAG / HOLD / BLOCK pipeline decisions. Covers 16M+ wallet profiles across 8 blockchains.

What Is Covered in Non-Custodial DeFi¶

DeFi protocols are non-custodial - there is no KYC step, no name to screen. Some MiCA obligations depend on an identity layer that does not exist in a wallet-only Dapp:

PEP screening - requires identity fields that are not present in a wallet address
Travel Rule - does not trigger on smart contract interactions
SAR filing - filing interfaces require identity fields to submit

These are structural boundaries of the non-custodial model, not coverage gaps.

What ChainAware delivers in full: sanctions screening, AML monitoring, and Transaction Monitoring - every MiCA control a non-custodial protocol can actually implement.