Chainalysis, a firm that develops compliance software, announced Wednesday that it has expanded its KYC services to cover four new cryptocurrencies, helping financial institutions, exchanges, and law enforcement agencies to monitor illicit activities across more blockchains.
Until now, the company only covered the most popular coins on the market, including bitcoin, Ether, Litecoin, and Bitcoin Cash. However, Chainalysis says it has responded to demands from clients to extend its compliance offering to new coins, which now includes Binance Coin, Gemini dollar, Tether and USD Coin.
“The request we get from our compliance customers is [to provide service for] as many coins as possible,” Chainalysis' product VP John Dempsey told The Block. “What customers expect is that we will be able to support compliance and investigations on every currency out there. This launch is not about [just] 10 currencies, but a launch about our ability to have support many many more over time,” said Dempsey.
Currently, it takes about a few weeks for Chainalysis to launch full KYC coverage of ERC-20 tokens. For coins on new blockchains such as Ripple or Binance Chain, it can take up to several months. Dempsey hopes that as the company’s technology becomes more mature, it will take less time to roll out additional compliance service for new cryptocurrencies.
According to Dempsey, crypto fiascos like the Liberty Reserve money laundering fallout have made banking regulators increasingly cautious of the space. In January this year, the Securities and Exchange Commission put out a call for businesses that can track blockchain data for its compliance enforcement activities. The Financial Action Task Force (FATF) then published a draft of its global cryptocurrency regulatory guidance, asking crypto exchanges to share all transaction information upon request from authorities, which Chainalysis criticised.
“I think pretty much every government agency has realized at this point that they have some exposure to cryptocurrency risk,” said Dempsey. “[Cyptocurrency regulation is] on the radar for the budgeting process and for the law enforcement agencies. Across the board you see cryptocurrencies being a matter of national importance for national security.”
Still, like many other software that offers “tracking” and “monitoring” service, Chainalysis’ crypto investigation software elicits privacy concerns among some blockchain users. However, Dempsey stressed that all of Chainalysis software was developed “purely based on our own work, our own research” without using any private user data.
This post has been updated to clarify the number of new tokens Chainalysis supports.
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