ChainSafeAI Participates in the Hong Kong Crypto Asset Risk Management Seminar

As the virtual asset market evolves at a rapid pace, traditional risk control approaches are increasingly inadequate to address the anonymity, cross-border nature, and high-frequency circulation of on-chain transactions. On February 5, 2026, the seminar “Turning Risk into Opportunity: Leveraging KYT to Optimize Crypto Asset Customer Risk Management”, jointly organized by Dun & Bradstreet (D&B) and ABCP and sponsored by ChainSafeAI, was held in Hong Kong. The event brought together professionals from regulatory bodies, law enforcement agencies, financial institutions, and technology companies to explore how KYT (Know Your Transaction) can enable a paradigm shift from passive compliance to proactive risk management.

I. Cross-Sector Dialogue: Building a New Ecosystem of Collaborative Governance

The seminar highlighted Hong Kong’s proactive stance and collaborative governance philosophy in the regulation of virtual assets. Hosted by Raymond Chai of D&B, the event featured keynote speakers representing diverse perspectives.

From a regulatory and law enforcement perspective, Bonnie Ngan, Chief Inspector of the Hong Kong Police Force, shared real-world cases and challenges in combating cryptocurrency-related crimes.

From an industry practice perspective, Jack Keung, Head of Compliance at a Hong Kong digital asset trading platform and former Compliance Manager at HashKey, discussed practical experience in balancing innovation and compliance in daily exchange operations.

From a technology solutions perspective, Lawson Luo, Partner at ChainSafeAI, provided a systematic analysis of how KYT overcomes the limitations of traditional KYC and delivers practical, deployable risk management tools for institutions.

The diverse attendee profile reflected deep cross-departmental collaboration, including representatives from the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA), and the Financial Services and the Treasury Bureau (FSTB), as well as officers from the Police, Customs, and the Independent Commission Against Corruption (ICAC). Compliance leaders from financial institutions such as Industrial Bank, Airstar Bank, Morgan Stanley, and Futu Securities were also present, jointly exploring pathways for the compliant and sustainable development of crypto asset businesses across different institutional contexts.

II. From KYC to KYT: A Fundamental Evolution in Risk Control Models

During the seminar, Estelle, Compliance Manager of ChainSafeAI’s Product and Compliance Department, emphasized that KYC alone is no longer sufficient to address dynamic on-chain risks. If KYC is likened to a static photograph, KYT is more like a live broadcast, continuously tracking fund flows and behavioral patterns to enable real-time risk identification and assessment.

This view was echoed by regulators. A representative from the Securities and Futures Commission noted that complex crimes such as cross-border money laundering using cryptocurrencies are on the rise, making real-time transaction monitoring capabilities an inevitable requirement for the industry.

Beyond showcasing KYT solutions, Estelle explained how ChainSafeAI leverages data and artificial intelligence to transform massive and fragmented on-chain transaction data into clear, actionable risk intelligence. The solution is built on three core technological pillars.

First, visualized risk identification. Through high-concurrency APIs, the system detects transactions at the millisecond level and performs real-time comparisons against continuously updated databases of risky addresses, including hacker wallets, mixers, and sanctioned entities, issuing timely alerts for high-risk interactions.

Second, on-chain address risk scoring. By deeply analyzing fund flows, address linkages, and behavioral patterns, the system generates dynamic risk scores for each address, enabling quantitative and tiered risk assessment.

Third, intelligent alerts and automated responses. Based on predefined rules and machine learning models, the system automatically generates risk alerts and integrates with existing institutional workflows, triggering predefined control measures such as transaction suspension or enhanced due diligence to improve response efficiency.

III. Addressing Core Challenges: Diverse Application Scenarios of KYT

In response to widely shared industry concerns, the seminar explored the practical value of KYT in depth. In the context of anti-money laundering and counter-terrorist financing, KYT can effectively identify suspicious patterns such as distributed fund collection followed by aggregation and transfer, significantly enhancing monitoring accuracy.

For customer risk tiering, dynamic scoring models based on continuous transaction behavior analysis enable financial institutions to apply enhanced monitoring to high-risk clients while reducing unnecessary intervention for low-risk clients, thereby optimizing the allocation of compliance resources.

In addition, Estelle systematically addressed challenges such as the complexity and inherent risk exposure of DeFi interactions and the difficulty banks face in verifying the on-chain source of funds. Through customized solutions, investment funds can monitor real-time risks associated with portfolio interactions with DeFi protocols, while banks can conduct on-chain tracing for incoming funds, supported by visualized fund flow paths and risk assessment reports. This effectively answers the critical question of whether funds originating from the blockchain can be considered clean.

IV. The Future of Intelligent, Integrated, and Compliant Technology

Looking ahead, KYT technology is expected to deeply integrate with regulatory technology and supervisory technology, evolving toward greater intelligence and standardization. Artificial intelligence will be used to automatically interpret regulatory changes across multiple jurisdictions and dynamically adjust monitoring rules and models. At the same time, privacy-preserving computing technologies such as zero-knowledge proofs are being explored to better balance effective compliance verification with user privacy protection and data security.

This seminar marks a new phase in the evolution of virtual asset risk management, one that is more refined and proactive. Compliance technology providers such as ChainSafeAI are helping regulators gain real-time on-chain visibility while enabling financial institutions to strengthen their risk control frameworks as they embrace innovation. As Hong Kong’s virtual asset regulatory framework continues to mature, the co-evolution of technology and regulation will provide critical support for building a safer and more transparent digital financial ecosystem.

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