Binance And Chainalysis Partner To Tackle Money Laundering Via Cryptocurrencies

For Binance, the largest cryptocurrency exchange in the world by market volume, which operates in several jurisdictions and makes trading possible amid a patchwork of regulations, compliance can be difficult. This is why Binance has partnered with cryptocurrency compliance and investigation solution provider Chainalysis to roll out a global compliance solution and help address money laundering issues in digital asset trading.

What Does The New Partnership Seek?

Binance and Chainalysis will help to address challenges related to regulators, traditional financial institutions, and compliance requirements. Jonathan Levin, cofounder and COO of Chainalysis, explained the utility of compliance requirements to Binance saying:

“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 Use Of Chainalysis At Binance

The crypto exchange has completed a global rollout of Chainalysis compliance solutions on its platform. Chainalysis’ compliance software called Chainalysis KYT (Know Your Transaction) will be employed at the exchange for real-time transaction monitoring in crypto transactions. The software relies on open-source references, pattern recognition, and a proprietary algorithm to categorize thousands of crypto services to raise real-time alerts on fraudulent activities.

Binance CFO Wei Zhou talked about building a foundational compliance program that will help to enable the growth of the exchange. He added:

“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.”

With the use of the company’s solutions, cryptocurrency service providers will be able to comply with anti-money laundering and know-your-customer regulations. The solutions also help crypto companies open bank accounts.

Chainalysis secured a $16-million Series A funding in April led by Benchmark. The funding was secured to create their KYT software solutions and include more cryptocurrencies in the coverage. The company is currently serving more than 150 crypto businesses, government agencies, and financial institutions.