While cryptocurrencies are now becoming a part of our everyday lives, governments all over the world are looking to apply a regulatory framework to this new industry. However, when it comes to cryptocurrency regulation and to undergo through compliance oversight, there is still much work to be done. This is the reason why Chainalysis, which is a company that dedicates to compliance and investigation on the regulatory field, is working to help companies, as well as individuals,  comply with the regulation.

Joining forces: Chainalysis and Binance

On the 17th of October, 2018, Chainalysis, which is a provider of cryptocurrency compliance and investigation solutions, announced that it was finishing the first global roll-out of its compliance situation. The test run has been conducted with Binance, which is the biggest crypto exchange by trading volume. Binance is working with Chainalysis to implement a new global compliance solution, as well as to give the right steps towards coping with the challenges which regulators are traditional financial institutions have when designing a regulatory framework to supervise the industry.

As part of the partnership, Chainalysis is also going to provide access to its “Know Your Transaction” compliance software, enabling the exchange to monitor crypto transactions in real-time. In particular, the tool is going to look for some potential criminal or otherwise illicit activity.

Chainalysis specialized in developing crypto investigation and compliance solutions to global law enforcement agencies, regulators, as well as businesses in an attempt to prevent illegal activity within the crypto industry. Also supported by Benchmark, as well as some other well-known names in venture capital, the company is working to build trust in crypto and blockchain industries.

Take anti-money laundering and anti-terrorism financing measures seriously

The chief financial officer of Binance, named Wei Zhou, said that he hopes the move about the partnership is going to inspire the cryptocurrency industry to take anti-money laundering and anti-terrorism financing measures seriously.

He stated that the ultimate goal of their partnership with Chainalysis is to create an environment in blockchain where everyone will feel safe. While the firm already invested in know-your-customer (KYC), as well as in anti-money laundering (AML) measures, and hired compliance professionals, he also said that criminals always look to loopholes in the system, so they are continuously on the lookout for new technologies, as well as methods to combat money laundering and malicious actors.

Chainalysis had the ability to gather $16 million in Series A funding, which was led by Benchmark in April 2018 in order to deploy the KYT and enlarge its support over the crypto industry. Now, the company is serving over 150 of the leading crypto businesses, financial institutions, as well as government agencies in the world, with respect to helping them draw a regulatory insight.

Chainalysis expect many to follow Binance’s lead

The system of Chainalysis works with the use of a combination of pattern recognition, proprietary algorithms, as well as different open-source resources to process crypto services. If any suspicious activity is detected at the time of a transaction, the software is going to generate an alert.

The tool is also helpful for crypto companies to ease the process of opening bank accounts, because of its compliance with relevant KYC and AML laws.

The co-founder and COO of Chainalysis, named Jonathan Levin, said that crypto businesses of all sizes face almost the same core challenge: to earn the trust of regulators, financial institutions and users too. He added that they expect many to follow the lead of Binance to build world-class AML compliance programs, to satisfy the regulators and build trust with major financial institutions.

Also, by working with financial leaders like Binance, he said that they have the ability to mold the foundation for credible, robust markets in all jurisdictions.

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