- Binance CFO, Wei Zhou says the alliance will help the crypto exchange to continue building growth-oriented foundational compliance programs
- Chainalysis may now be in charge of the exchange’s AML/KYC procedures
In a bid to tackle the activities of crypto criminals effectively and foster more compliance with anti-money laundering (AML) and know-your-customer regulations, the world’s largest cryptocurrency exchange by volume Binance has joined forces with Chainalysis, a US-based firm whose primary objective is to help financial institutions and bitcoin-related businesses detect fraudulent cryptocurrency transactions.
Fighting Crypto Money Laundering
Per sources close to the matter, Binance has announced its strategic partnership with Chainalysis, a distributed ledger technology project which claims to provide highly functional tools to ‘identify and classify a vast array of cryptocurrency services to raise real-time alerts on suspicious or outrightly fraudulent bitcoin transactions.’
At a time when forward-thinking nations across the globe, including Japan, South Korea and several others have made it compulsory for bitcoin-linked businesses to conduct extensive AML/KYC checks on their customers, the Binance-Chainalysis alliance appears to be an excellent move in the right direction.
A Match Made in Heaven
This April reports emerged that the New York-based firm had raised $16 million from Benchmark, an American venture capital firm, to enable it expand its operations.
“The business is growing faster than ever. The downturn has actually been good since exchanges are now focused on compliance and risk, and not just trying to onboard their millionth customer in a month,” Chainalysis co-founder, Jonathan Levin told Fortune at the time.
Focused initially on assisting law enforcement to fight crime and offer compliance tools to banks and other traditional financial institutions, Chainalysis has also created several tools useful for cryptocurrency exchanges and related businesses, including its KYC solution called “Know your Transaction” (KYT).
It’s worth noting that since Binance expanded its operations to cryptocurrency-friendly Malta, the digital assets trading platform has been doing significantly well.
Commenting on the partnership, CFO of Binance, Wei Zhou reiterated that the firm’s alliance with Chainalysis would enable it to continue developing a robust compliance program that would support the next growth phase of Binance, as the exchange’s goal is to increase global crypto adoption while also adhering to regulatory frameworks of its host nations.