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Bitfinex Taps Chainalysis for Crypto AML Compliance


Crypto Currency

Bitfinex Taps Chainalysis for Crypto AML Compliance

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Bitfinex, the crypto exchange and sister company of Tether coin, has activated its partnership with Chainalysis, a New York-based provider of compliance software for real-time monitoring of cryptocurrencies transactions.

The self-described “leading provider of AML software for Bitcoin” allows cryptocurrency exchanges to distinguish suspicious patterns in real time and obtain law enforcement information. The company’s offering also includes a KYC solution, dubbed Chainalysis KYT (“Know Your Transaction”).

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The announcement comes amid reports linking Bitfinex to drug trafficking and money-laundering schemes operated by the owners of Crypto Capital.

Over the past year, Chainalysis deployed its real-time anti-money laundering and compliance software, and also expanded its coverage beyond Bitcoin to include Ether, Litecoin, Bitcoin Cash, and stablecoins.

“The solution does not share information identifying users, which is kept strictly in-house. We are excited to work alongside the Chainalysis team to continue to build out a safe and robust platform for our users,” said Peter Warrack, Chief Compliance Officer at Bitfinex.

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Binance also signed up for Chainalysis KYT

Chainalysis’ compliance software can help both crypto firms and law enforcement agencies detect suspicious activity in order to battle any related criminal activity. It uses pattern recognition, algorithms and millions of open source references to “identify and categorize thousands of cryptocurrency services to raise live alerts on transactions involved in suspicious activity,” the company says.

The company has already signed other major cryptocurrency exchanges, including the likes of Binance, to automate their process of screening transactions and monitoring user activity.

Chainalysis has a few rivals in the market whose solutions strive to prevent, detect and investigate cryptocurrency money laundering, fraud, and compliance violations. The biggest competitor, though, is the UK-based Elliptic which offers a proprietary compliance and fraud detection technology.

The concerns over cryptocurrency mining, trading, and usage to transfer money are already shared by several ‎governments‏ ‏across the globe.

Of note, the cryptocurrency industry has recently seen several hires from mainstream finance firms in order to respond to the recent calls to regulate the nascent business, which are gathering steam with several regulators now require the operators of such venues to perform the same level of client due diligence as banks do.

Extending AML regulations to cryptocurrency activities is being considered in several countries around the world such as Australia and the UK, and already tracks the EU’s recent push to regulate Bitcoin.



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