With the FATF deadline approaching fast, VASPs are scrambling to integrate their platforms with AML compliance procedures provided by companies like Chainalysis & Coinfirm. Recently, institutional digital-asset security specialist Fireblocks announced that it would be adding Chainalysis’s Know Your Transaction (KYT) software suite to its platform to monitor crypto transactions within its platform — strengthening security standards & AML compliance.
In a couple of other significant moves, two leading blockchain projects — Algorand and Tezos have teamed up with Chainalysis and Coinfirm, respectively to integrate regulatory compliance into their blockchain ecosystems. For Algorand, Chainalysis will provide its Know-Your-Transaction (KYT) solution — allowing its foundation to monitor large volumes of on-chain activity for the native ALGO token and report any suspicious transactions to the authorities.
Tezos’ partnership with Coinfirm is much more broad-based enabling its foundation and commercial entities such as exchanges to monitor activity on the protocol. Actually, it goes beyond a partnership — allowing Coinfirm’s AML Platform to be available for Tezos and XTZ transactions. Confirm had also signed a deal with Ripple last summer to tag transactions on the XRP ledger that may have been laundered through mixer services.
Another key player in the Crypto intelligence arena, CipherTrace rolled out a solution, allowing wallet services and exchanges to securely share information about their customers to comply with the Travel Rule.
Despite being met with skepticism and trepidation, when the travel rule was first unveiled — fearing the compliance burden would lead to an end for user privacy and decentralization, VASPs have come around by adopting and embracing the new regulatory landscape.
Regulators should meet the novel industry in the middle ground by not stifling the innovation. As for the VASPs, the message is clear… they are here to stay.
