Two of the cryptocurrency industry’s biggest names are partnering up in an effort to bring greater regulatory compliance to the space.
Leading digital asset exchange platform Binance and blockchain analysis firm Chainalysis will be working together on solutions to earn the trust of global regulators.
Chainalysis Working with Binance on KYC and AML Compliance
According to a press release, the blockchain analysis company will be working closely with the Binance cryptocurrency exchange platform on solutions to allow greater compliance with regulators.
The first software that the two firms have rolled out together is known as Chainalysis KYT (“Know Your Transaction”). It’s the only service of its kind and will provide transaction monitoring services in real-time.
The service will give live alerts for transactions suspected of being involved with illicit activity. To achieve this, Chainalysis KYT uses “pattern recognition” and “proprietary algorithms,” combined with a library of open source references.
Jonathan Levin, co-founder and chief operating officer at Chainalysis, spoke about the goals of the new software and partnership with Binance:
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users… We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions.”
The Chainalysis software will hopefully make services like Binance and other companies involved in the ever-growing crypto industry more compliant with existing anti-money laundering and know-your-customer regulations. It is also thought that by using Chainalysis KYT, businesses handling digital assets will find it easier to open traditional bank accounts.
Wei Zhou, chief financial officer of Binance, also provided comment on the partnership and how it might benefit the wider industry:
“By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth… Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve.”
In April this year, Chainalysis received around $16 million from a Series A funding round to help launch the Chainalysis KYT software.
Previously, the analysis firm has provided information to the likes of Europol on money laundering facilitated by cryptocurrencies. It has also contributed research on the number of Bitcoins thought lost due to users losing private keys.
According to the press release, the firm is currently collaborating with over 150 of the largest digital asset-related businesses and government agencies on the planet.
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