Binance New Software To Detect Illicit Transactions
In the latest cryptocurrency news, Binance has revealed its new software designed to deter any illicit transactions via a press release. The biggest cryptocurrency exchange by trading volume is reportedly working alongside with crypto compliance and investigation software provider Chainalysis. The two firms basically hope to implement a new global compliance solution.
Monitoring Crypto Transactions
As part of the alliance, Chainalysis is tasked to provide access to its “Know Your Transaction” compliance software, which enables the exchange to monitor cryptocurrency transactions in real-time. In particular, the tool is designed specifically to look for potentially criminal or otherwise illicit activity.
Binance’s chief financial officer, Wei Zhou, said that he is looking forward to the possibility of this decision to “inspire” the entire crypto industry. He believes that it is high time to take anti-money laundering and anti-terrorism financing measures seriously.
“The ultimate goal of our partnership with Chainalysis is to create an environment in blockchain where everyone feels safe,” he said. “We believe the fight against money laundering to be collaborative and pro-active.”
It is worth noting that in the past few months, these illicit activities have plagued the crypto industry. There were reports of dupe transactions and other exploits.
While the firm has already invested in know-your-customer (KYC) and anti-money laundering (AML) measures, and hired compliance professionals, 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.”
How The System Works
Chainalysis’ system works by using a combination of pattern recognition, proprietary algorithms, and different open-source resources. All of these elements work together in order to process cryptocurrency services. If suspicious activity is detected during a transaction, in one way or another, the software will automatically generate an alert.
The tool can also help cryptocurrency companies to ease the process of opening bank accounts, due to its compliance with relevant KYC and AML laws, according to the release.
Chainalysis co-founder and COO Jonathan Levin called out all cryptocurrency market participants, suggesting that it only makes sense for them to “develop greater trust in the data and technology underlying our ecosystem.” Levin believes that doing so will significantly help in advancing the overall space.
“By working with industry leaders like Binance, we’re able to mold the foundation for credible and robust markets in all jurisdictions,” he said.