Binance and Chainalysis have formed a partnership in a bid to provide a solution in the fight against money laundering involving cryptocurrency.
The world’s largest digital currency exchange operator, Binance, has teamed up with cryptocurrency investigation and compliance solutions Chainalysis to help address the challenges of money laundering in the cryptocurrency space and provide a solution for market regulators and financial institutions.
Chainalysis COO and co-founder Jonathan Levin said in a statement:
“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.”
He explained that the company’s generically developed compliance software, Chainalysis KYT (Know Your Transaction), remains the only available provider of real-time transaction monitoring capability for the digital space.
He added that KYT analyzes patterns, millions of open source references, and proprietary algorithms to categorize and identify countless of digital currency services to provide live alerts on suspected fraudulent activities or transactions in the virtual currency space.
“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,” added Binance CFO Wei Zhou.
In a joint statement, both Binance and Chainzilla described the software as the “best-in-class” solution that enhances the ability of financial firms and digital asset businesses to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, while at the same time making it easier for cryptocurrency-involved companies to open bank accounts.
An investigation conducted by the Wall Street Journal has found that an estimated $88.6 million had been laundered by criminals using 46 cryptocurrency exchanges. The report added that at least $9 million of the illegally obtained funds were coursed through Swiss-based cryptocurrency trading platform ShapeShift.
The head of the Financial Action Task Force (FATF) announced in September FATF would release a global standard on cryptocurrency anti-money laundering this month. FATF president Marshall Billingslea is confident that a worldwide standard will be ready when the group meets again.