Binance Using AML Compliance Software From Chainalysis to Fight Money Laundering

Siamak Masnavi

On Wednesday (17 October 2018), Blockchain analysis software provider Chainalysis announced via a press release that it was going to use its compliance software suite to help crypto exchange Binance comply with anti-money laundering (AML) regulations around the globe.

Chainalysis provides software solutions, namely "Chainalysis Reactor" and "Chainalysis KYT", which are used for investigation and compliance purposes by institutional clients, such as banks and crypto exchanges, as well as governmental bodies from around the world.

Chainalysis KYT ("Know Your Transaction") is the "only real-time transaction monitoring solution for cryptocurrencies." KYT generates "real-time alerts on incoming and outgoing transactions for links to potentially suspicious activity." It also provides "live customer risk profiles", which means that "compliance analysts get dynamically updated customer risk profiles with the most up to date information from the blockchain for periodic reviews." Chainalysis uses "pattern recognition, machine learning and millions of open source references to identify and categorize 1,000’s of cryptocurrency services."

Chainalysis has already completed a global roll-out of its KYT suite with Binance, and it will help Binance to keep financial regulators happy and make it much easier for the exchange to open bank accounts at all of the different jurisdictions in which it wants to operate. This partnership also helps Chainalysis to get both its investigation and compliance software solutions adopted by other exchanges.

Jonathan Levin, Co-Founder and COO of Chainalysis, said:

“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.”

Wei Zhou, CFO at Binance, stated:

“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.”

On 10 October 2018, as covered by CryptoGlobe, Chainalysis published the results of its latest research in a blog post, with the report concluding from observed data that Bitcoin whales (i.e. the largest holders) are "a diverse group that may be stabilizing, rather than destabilizing, the market."

In April 2018, Chainalysis was able to secure $16 million "in Series A funding led by Benchmark to deploy Chainalysis KYT and expand its coverage of cryptocurrencies."

 

Featured Image Courtesy of Chainalysis