Compliance and fraud detection are two major pain points for all cryptocurrency exchanges. Establishing procedures that can help in continuous monitoring of these two areas requires tremendous amount of effort. However, technology helps with everything, and if companies are continuously on the lookout for new solutions related to anything, they can eventually find something to ease their life. Binance has proved this once again. It has partnered with crypto compliance software provider Chainalysis to implement a new monitoring system for fraud detection.
The partnership was announced a few hours back, and as part of this partnership Chainalysis will provide Binance with access to its “Know Your Transaction” software. The software has been developed to monitor transactions in real-time, and whenever it spots any suspicious transactions it generates an alert. It can also help Binance in opening bank accounts as it’s compliant with KYC and AML guidelines of major economies.
Speaking about the partnership Mr. Wei Zhou, Chief Financial Officer (CFO) of Binance told Coindesk:
“The ultimate goal of our partnership with Chainalysis is to create an environment in blockchain where everyone feels safe. We believe the fight against money laundering to be collaborative and pro-active.
While company already has strict KYC and AML measures in place, and also has a dedicated team of compliance professionals, Mr. Zhou said that it’s important to be on the lookout for new technologies if criminals have to be stopped. He said:
“Criminals are always looking to loopholes in the system, so we are continuously on the lookout for new technologies and methods to combat money laundering and malicious actors.”
Mr. Jonathan Levin, the Chief Operating Officer of Chainalysis, also said that this new partnership will help the entire ecosystem. He said:
“Cryptocurrency market participants must develop greater trust in the data and technology underlying our ecosystem in order for the overall space to advance. By working with industry leaders like Binance, we’re able to mold the foundation for credible and robust markets in all jurisdictions.”
The Chainalysis software uses a combination of proprietary algorithms, pattern recognition technologies and several open-source resources to detect fraudulent and illicit transactions. It will be interesting to see which other exchanges adopt its technology after Binance.
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