The Chainalysis analytics company launched sanctions screening tools for NFTs and DEFI which will help decentralized projects to improve their tracking possibilities as we can see more in today’s latest crypto news.
Chainalysis analytics company announced the launch of two new tools that will make it easier to screen crypto wallets for sanctions compliance. The tools will include an on-chain oracle which is available today and an API programming interface that acts as a connection between computers that will launch next month. The company said:
“As countries around the world continue to leverage economic sanctions in response to Russia’s invasion of Ukraine, decentralized Web3 groups like DEXs, DeFi platforms, DAOs, and dapp developers are searching for lightweight tools to help them and their customers comply with sanctions policies.”
The co-founder and CEO of Chainalysis, Michael Gronager noted:
“Now is the time for the industry to demonstrate that blockchains’ inherent transparency make cryptocurrency a powerful deterrent to sanctions evasion.”
The company said that the tools will be provided to crypto market participants for free and he also added that Chainalysis prioritized the development of the tools in order to give the industry what it needs to conduct sanctions screening at no cost. The sanctions screening oracle is basically a smart contract that is bits of computer code designed to perform a series of instructions and validate whether a wallet address has been included in a sanctions designation.
The API will use the same data as the oracle to confirm whether the address is on a sanctions list but it is also designed for public and web user interface as opposed to the on-chain oracle that is designed for DEFI projects. The new tools are meant to provide a way for DEFI projects and DAOs to screen for potentially sanctioned addresses. While centralized exchanges like FTX and Coinbase have know-your-customer policies in place to screen for sanctioned individuals, the decentralized exchanges that exist in the world of DEFI do not. Chainalysis added:
“Many decentralized protocols and platforms that have more recently grown in popularity do not incorporate tools that allow for effective management of sanctions risk.”