Chainalysis working with Binance on transaction compliance
Binance and blockchain analysis firm Chainalysis are partnering in order to introduce transaction monitoring service known as the KYT or Know Your Transaction, the only service that will provide transaction monitoring in real time. Chainalysis has now completed a global roll-out of its compliance solution with Binance.
It will be a world-class AML compliance program. The launching of this software follows their around $16 million from a Series A funding round in April to help in the same initiative.
The goal is to have a service to help cryptocurrency firms, startups and users become compliant with existing anti-money laundering regulations or Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. It will also make it easier for businesses handling digital assets to open traditional bank accounts.
It will thus make it possible for traditional banking institutions to collaborate in providing banking services to cryptocurrency firms and customers within a regulatory framework, as this conflict has widely been reported recently.
The service will alert users for transactions that have been suspected of being involved with illicit activity. To achieve this, the software will use pattern recognition and proprietary algorithms combined with a library of open source references.
It could see them gaining more trust of financial regulators and financial institutions, and hopefully stir another wave of increased institutional and retail investments in digital assets sector.
Chainalysis KYT, as it is called, is the only software that provides for real-time transaction monitoring for cryptocurrencies. According to the press release from Chainalysis about the undertaking, it uses algorithms and pattern recognition to millions of open-source to identify and categorize thousands of cryptocurrency services to raise live alerts on transactions involved in suspicious activity.
Chief financial officer of Binance Wei Zhou said that the initiative is the next phase of growth. He said that they envision at providing a blockchain ecosystem that increases the freedom of money globally while adhering to regulatory mandates in the countries they serve.
Not only has Chainalysis provided information to the likes of Europol in relation to money laundering facilitated by cryptocurrencies but has also contributed research on the number of Bitcoins thought lost due to users losing private keys. It is currently working with over 150 of the largest digital asset-related businesses and government agencies.
Their initiatives could generally reduce the perceived risks involved in dealing with cryptocurrencies, which includes fraud and money laundering. These are some of the main concerns of cryptocurrencies as claimed by regulators globally.