Anti Money Laundering System Using Blockchain on User Identification and Risk Assessment

Ang, Xin Yue (2024) Anti Money Laundering System Using Blockchain on User Identification and Risk Assessment. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

Money laundering has evolved significantly over time, particularly with the advancements of technology. These illicit activities have since shifted to digital platforms, possessing advantages of the convenience and tools available in the digital age. Traditional systems are struggling to keep up with the change, resulting in a rise of undetected money laundering cases. The ineffectiveness of the current systems due to the centralization of data and lack of transparency are also a main factor in this situation. The consequences can be severe as it brings destruction to financial integrity, leaves illicit activities running free and threatens national security. With the implementation of blockchain technology, where its nature is immutability and transparency, it is expected that traditional systems be restructured to achieve ease in handling money laundering cases. In this part of the project, user identification and risk assessment is mainly covered. The covered modules include User Management Module, Risk Management Modules, Database Management Module for User Database and Security Management Module. The system mainly involves functions such as Registration, Login, Profile Management, Admin Functions and many more. The system will be developed using HTML, CSS, JavaScript along with Node.js, Express.js and many more libraries for the individual functions. Smart Contracts are deployed from Remix IDE to a private blockchain residing in Ganache, which a MetaMask extension will be involved in connection. The Agile Software Development Model is used due to the limited time and project size and questionnaires were distributed to determine the functional and non-functional requirements of the system. Testing was carried out following the flow of unit testing, integration testing, system testing and lastly acceptance testing. Ultimately, the system proved to grant enhanced security and easier tracking for transactions. Although so, limitations such as the inability to identify real-world users and inability to track real-world inefficiency still stays