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Glossary term

What is Risk taxonomy?

A risk taxonomy is the structured list of risk categories a screening program uses to classify addresses and activity, such as sanctions, scams, ransomware, darknet markets, hacks, and gambling. A detailed taxonomy lets compliance teams set different policies per category and explain exactly which kind of risk triggered a result.

Definition

Categories classify risk; they are not counterparties. One payment can fall under several categories at once, for example money laundering and sanctions, so amounts reported per category overlap and should not be added into a single total.

CipherOwl's taxonomy has 194 categories, so results name the specific risk rather than a generic high-risk flag.