Blockchain Analytics Shifts Focus from Simple Transaction Tracing to Holistic Risk Assessment
Blockchain analytics has become crucial for risk management and compliance in the financial sector. With the rise of decentralized finance (DeFi) and increased scrutiny from regulators, organizations need to move beyond simple transaction tracing and take a more holistic approach to understanding financial crime risks.
Traditional methods of detecting fraud often rely on known scam addresses or wallet checks, but this approach has its limitations. According to Chainalysis, crypto scams and fraud caused around $17 billion in losses during 2025, with the average scam payment rising by 253% year over year. The use of AI in scams is also becoming more prevalent, with reported losses from deepfake scams already exceeding those from 2025 by 263%.
Modern blockchain analytics can connect several risk functions within one system, providing a clearer view of the full transaction path and risk factors. This approach can shorten investigation time and help identify unusual wallet activity, rapid fund transfers, repeated address links, and suspicious cash-out routes. DeFi transactions, which can involve smart contracts, decentralized exchanges, bridges, and multiple blockchain networks, require graph analysis to assess risk effectively.
The FATF highlighted the risks associated with DeFi in its July 2026 report, noting that only two of 142 jurisdictions had licensed or registered a DeFi arrangement in practice. Compliance teams need deeper blockchain intelligence to understand control, ownership, and risk across a DeFi structure, which cannot be explained by wallet data alone.