On Oct. 17, the world’s largest cryptocurrency exchange by volume, Binance, announced a partnership with blockchain surveillance company Chainalysis. According to the exchange, Chainalysis has implemented a compliance solution that meets regulatory guidelines worldwide.
Binance Is Using Chainalysis for Compliance
According to a press release published on Oct. 17, Binance and Chainalysis have joined forces to create a compliance solution for trading operations. The collaboration will further ensure that Binance exchanges comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. The co-founder of Chainalysis, Jonathan Levin, explained during the announcement that all cryptocurrency businesses face the challenge of “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,” Levin detailed. “Chainalysis’ compliance software, Chainalysis KYT (Know Your Transaction), is the only real-time transaction monitoring solution for cryptocurrencies.”
To Some, Regulatory Compliance and Permissionless Innovation Mix Like Oil and Water
Levin says that the Chainalysis software uses methods like proprietary algorithms and pattern recognition that can raise alerts when suspicious transactions happen. Binance will be able to leverage the KYT software and other services Chainalysis offers. Wei Zhou, CFO at Binance, says the collaboration helps the exchange build a “foundational compliance program.”
“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,” Zhou stated.
Overall, both companies believe the compliance solution will enhance the cryptocurrency environment.