Crypto surveillance firm Chainalysis has launched a special edition of its real-time anti-money laundering (AML) compliance solution, "Know Your Transaction (KYT)", for stablecoins.
Chainalysis, which was founded in 2014 by Dr. Michael Gronager (the current Chief Executive Officer), Jan Moller (the current Chief Technology Officer), Jonathan Levin (the current Chief Operating Officer), is a company with two main products—"Chainalysis Reactor" and "Chainalysis KYT"—that 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."
On Thursday (January 24th), Chainalysis announced via a press release "the launch of Chainalysis Know Your Transaction (KYT) for Stablecoins, a real-time anti-money laundering (AML) compliance solution for monitoring stablecoins across every transaction through their full lifecycle, including issuance and redemption." The company says that the stablecoin version of Chainalysis KTT is " the first solution of its kind to be applied to stablecoins, cryptocurrencies designed to minimize price volatility, usually by pegging or backing their value to other assets," and believes that this launch demonstrates its "commitment to providing market-leading compliance technology across a comprehensive suite of cryptocurrencies and tokens" at an opportune moment since "stablecoins are rapidly growing in popularity."
According to Chainalysis, it used to be "difficult for cryptocurrency businesses to enact proper AML controls, making it challenging to establish banking relationships and exposing them to regulatory and reputational risk;" however, Chainalysis KYT "enables them to monitor large volumes of cryptocurrency activity and identify high risk transactions on a continuous basis." Furthermore, it helps stablecoin issuers to "meet higher AML compliance standards that support broader adoption."
Chainalysis KYT "applies global AML standards to each transaction across all users within an organization's user base." Issuers of sablecoins "can integrate with Chainalysis KYT via an API to immediately begin monitoring large volumes of activity and identify high risk transactions on an on-going basis" as well as "leverage the user interface to quickly understand the risk profile of each stablecoin holder with the latest data and filter them by level of risk exposure to identify those that require the most immediate attention."
Jonathan Levin, the COO of Chainalysis said:
"Chainalysis exists to build trust in cryptocurrencies among institutions and users. The repeated knock against cryptocurrency is its volatility, and trust in stablecoins could lead the way to increased commercial use. Chainalysis KYT for stablecoins further supports this vision by raising the bar for accountability and providing compliance teams with the technology they need to meet AML requirements."
Andrew Chang, the Chief Operations Officer at Paxos Trust Company, the issuer of stablecoin Paxos Standard (PAX), stated:
"We created Paxos Standard (PAX) as a stable, digital currency that can be used for payment on transactions around the world. That's why it was key for us to find a partner that could automate the process of screening for illicit activity. Chainalysis KYT is the first solution that can screen PAX transactions. Since PAX is the first regulated stablecoin, it's important that we operate responsibly, reduce risk exposure for our entire ecosystem, and maintain the integrity of our stablecoin."
And Alex C. Levine, the Chief Regulatory Officer and Head of Legal at TrustToken, the issuer of stablecoin TrueUSD (TUSD), had this to say:
"Working with Chainalysis helps us set a new standard for trust in the marketplace. Chainalysis KYT not only provides important AML checks, but also strengthens our banking relationships, which ultimately enables us to be transparent with our customers about our holdings and show one-to-one parity with our TrueUSD token and the US dollar."
The current version of Chainalysis KYT supports select ERC-20 stablecoins, and the company plans to add support "for additional tokens in the coming months."
On 17 October 2018, Chinalysis announced 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.
Featured Image Courtesy of Chainalysis