The center of gravity of the security agenda in the cryptocurrency ecosystem is shifting to financial activities supported by artificial intelligence and beyond human supervision, rather than large-scale hacking incidents in the near future. This change forces security companies in the sector to redesign their compliance processes.
Changing adaptation processes with artificial intelligence
Simone Maini, CEO of Elliptic, which develops blockchain analytics solutions, states that traditional compliance and monitoring systems in their current form often rely on manual reviews. Expert teams investigate wallets one by one, analyze notifications and try to detect suspicious transactions. However, when financial transactions progress continuously and at machine speed thanks to artificial intelligence, this method begins to lose its adequacy.
According to Maini, the lack of a sufficient number of expert analysts working on digital assets globally is a significant bottleneck in the current operation. While stable cryptocurrencies, tokenized assets and payments made with artificial intelligence are the new growth areas of the sector, traditional financial institutions are also turning to digital assets. Thus, scaling of compliance and monitoring systems becomes inevitable.
Elliptic’s new generation harmony attack
In response to this rapid transformation, Elliptic received a $120 million investment last week to develop an artificial intelligence-supported, “agent”-based compliance infrastructure. The system, which will be implemented with the support of major financial institutions such as Nasdaq and Deutsche Bank, is designed to automatically review volumes that exceed the capacity of existing teams.
“As transaction volume increases, the cost of reviewing and investigating each notification decreases. We reverse the cost of compliance for our customers,” says Simone Maini.
Thanks to the new system, it becomes possible to reduce costs per unit despite the increased processing intensity. Thus, the company wants to base the adaptation process on a more financially sustainable model for its customers.
Artificial intelligence is effective not only in defense but also in attack
However, these same AI tools make it easier not only for security teams but also for malicious actors. Maini emphasizes that these technologies enable attackers to attack more cheaply and more widely.
Artificial intelligence paves the way for attackers to carry out hacking and fraud activities on a scale that was not possible in the past.
This situation turns into an automation-supported “arms race” in crypto security. While attackers cheapen phishing and various fraud methods; Security teams are also developing their own artificial intelligence models and trying to capture suspicious activities in real time and with larger data sets.
Current state of the industry and future expectations
Using its own artificial intelligence agents, Elliptic collects information on the blockchain, associates wallets and instantly detects suspicious transaction patterns. Despite the many recent prominent hacking incidents, Maini notes that there have been significant developments in the industry over the last decade.
It is reported that significant progress has been made in monitoring and detection tools, especially with the increasing popularity of stablecoins, decentralized finance and tokenized assets. Maini interprets the transition of corporate finance actors to blockchain as “a Pandora’s box has been opened in digital assets” and points out that regulation and security processes have gained more value than ever before.
