- Tool to help in identifying high-risk transactions
- Chainalysis provides blockchain compliance software
- The move will increase trust and enhance crypto adoption
Bitfinex cryptocurrency exchange has tapped into an anti-money laundering tool from Chainalysis, the blockchain analysis firm. The solution will enable the exchange to monitor cryptocurrency transactions in real-time and detect and prevent money laundering.
Focus on More Urgent Activity
Chainalysis announced on Thursday, December 12, 2019, via a press release that its “Know Your Transaction (KYT)” compliance tool will enable Bitfinex cryptocurrency exchange to critically observe large volumes of crypto-related activity besides identifying high-risk transactions continuously. Chainalysis said this would enable the exchange to focus on the most urgent activity and enforce compliance policies. Commenting on the development, Chainalysis Chief Revenue Officer Jason Bonds stated:
“Bitfinex is known as a destination for cryptocurrency traders seeking liquidity across various cryptocurrencies, and that volume requires an automated blockchain analysis solution in order to comply with regulations across the world.”
Chainalysis oversees the blockchains of some 41 crypto-assets such as Bitcoin, Ether, Bitcoin Cash, Litecoin, and ERC-20 tokens such as Tether, Maker, and DAI. The firm’s tools enable cryptocurrency exchanges to follow regulatory compliance procedures that are increasingly needed due to the stringent controls imposed by jurisdictions around the world.
The company’s KYT (Know Your Transaction) tool enables crypto companies like Bitfinex can monitor large volumes of cryptocurrency exchanges and identify high-risk transactions in real-time. Chainalysis also provides compliance software and blockchain analysis to banks, businesses, and governments around the world. The firm’s expert team in financial crime and economic analysis helps to detect suspicious actions that need to be investigated.
Safe and Robust Platform
Chainalysis said the solution they have integrated prevents the sharing of information that can identify a user on the platform beside the fact that it stores the same information “strictly in-house.” Bitfinex Chief Compliance Officer Peter Warrack said they are excited to work with Chainalysis in creating a safe and robust platform. Warrack added:
“Chainalysis is a top-of-the-line, comprehensive and privacy-safe compliance solution aligned with what we were seeking to keep bad actors off of our platform while protecting the privacy of our users.”
Bitfinex uses this new tool one month after trimming its workforce by at least 20 percent to remain in the path of profitability. The exchange joins the like of Bittrex and Binance who are already using Chainalysis’ KYT software to screen suspicious transactions. Happening at a time when establishing proper compliance procedures is becoming more critical and jurisdictions around the world are closely scrutinizing the cryptocurrency industry, this increases trust and eventually crypto adoption.