Binance, the world’s largest Bitcoin exchange by tradingvvolume, is taking action against money laundering with crypto currencies. By integrating the Chainalysis KYT software, the exchange is expanding its compliance with traditional financial market regulations.
As Chainalysis announced yesterday, Thursday, 18 October, the company is now working with the Binance crypto exchange. Binance uses the Chainalysis software KYT (“Know Your Transaction”) to establish compliance in the area of money laundering. According to the company, KYT is software specially developed for the identification of money laundering activities. The functionality of Chainalysis on medium is described as follows:
Chainalysis KYT provides real-time feedback on the underlying purpose of transactions and feeds that feedback into exchanges’ transaction processing engines. Compliance personnel use our dashboard to generate alerts on risky customers and export suspicious activity reports. We have opened KYT to a small group of early customers, and they have already seen a 20x improvement in the speed of account reviews. Chainalysis KYT is based on a set of proprietary algorithms that use a number of open source resources to identify and report suspicious patterns in the transaction behavior of monitored wallets.
Since this year, the tool has included BCH monitoring in addition to BTC analysis.
Binance drives professionalization forward
We have already reported in detail on Binance’s expansion efforts in Africa. The cooperation with Chainalysis must therefore be seen in the light of the exchange’s growth intentions. These are accompanied by strict regulations, which the exchange must comply with. Binance CFO Wei Zhou adds:
By working with Chainalysis, we can build a compliance program that will enable the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and promote the freedom of money worldwide, while complying with the legal requirements in the countries where we operate.
It is precisely these legal requirements that may have led Binance to partner with Chainalysis. The tool helps the Exchanges to comply with the legal know-your-customer and anti-money laundering regulations. This type of compliance could ultimately enable exchanges to obtain their longed-for bank licenses. And that is exactly what the crypto universe needs – compliance with regulations, serious infrastructure on the edges of the cryptocurrency ecosystem – exchanges, wallets and other gatekeepers and on-ramps to the system need to be efficient and user-friendly before the mainstream adoption kicks in.
