Regulation of prediction markets

Why is it important to check wallets?

In an environment of tightening cryptocurrency market regulations, it is crucial to understand the risks associated with using crypto wallets and platforms. Checking wallets and transactions is not just an additional precaution, but a key step in protecting your assets and reputation. Below, we break down why checks are so important, what threats exist, and how to minimize risks.

Main reasons

1. Risks of blocking or freezing funds
   Regulators and platforms actively track transactions associated with "dirty crypto"—funds originating from mixers, hacks, or sanctioned addresses. Even accidental interaction with such funds can lead to lengthy investigations, account blocks, or denial of service.

2. Legal compliance
   If your wallet is linked to suspicious transactions, it may attract the attention of tax authorities or law enforcement. The inability to prove the legal origin of funds can lead to legal consequences.

3. Reputational risks
   For businesses or professional traders, it is important to avoid working with counterparties whose addresses are flagged as high-risk. This directly affects the trust of partners and clients.

Main Risks

Who is at risk?

1. Users of centralized exchanges
   Storing assets on exchanges increases the likelihood of them being frozen in the event of suspicious operations.

2. Large holders (Whales)
   Owners of significant reserves are subject to additional scrutiny, especially in jurisdictions with strict regulations.

3. P2P exchanges
   When working with unregulated platforms, you run the risk of accidentally interacting with "dirty crypto."

Potential threats

• Account blocking
• Sanction labels on transactions
• Tax or criminal proceedings
• Loss of access to assets

How to protect yourself?

Step 1. Check the wallet before transferring

• Use blockchain explorers (e.g., Etherscan, Blockchain.com, BscScan).
• Check address history: transactions with mixers, links to sanctioned addresses, or stolen funds.
• Pay attention to labels. Many explorers flag addresses associated with fraud or hacks.

Step 2. Use AML screening

• Use tools for automated address verification against sanction lists and databases of suspicious transactions.
• Incorporate AML screening into your asset management process to minimize the risks of interacting with "dirty crypto."

Step 3. Regularly audit platforms

• Ensure the platform you use complies with KYC/AML requirements and has transparent policies.
• Check your account status: ensure KYC documents are up to date and there are no open requests or suspicious activities.

Step 4. Manage risks

• Diversify assets: do not store all funds on a single platform.
• Use cold wallets for long-term storage.
• Stay informed about cryptocurrency regulations in your jurisdiction.

Conclusion

Regularly checking wallets and transactions, complying with KYC/AML rules, and using reliable tools for address analysis are mandatory measures for risk minimization. Ensure your assets are safe and your activities comply with the law. A conscious approach to asset management helps avoid blocks, losses, and legal issues.