Chainalysis Adds ‘Suspicious Alerts’ to Compliance Solution

Chainalysis Alerts include different severity levels based on their self-calculated score for each specific vulnerability.

Blockchain intelligence platform Chainalysis has enhanced its KYT solution, which helps token issuers comply with regulatory requirements across different jurisdictions, with the addition of suspicious crypto transaction alerts.

The New York-based firm said the new upgrade covers the 15 cryptocurrencies it supports with alerts being generated whenever a transfer involves a risky counterparty and crosses a value threshold.

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Chainalysis Alerts include different severity levels based on their self-calculated score for each specific vulnerability and risk factors such as category, service, direct versus indirect exposure, the direction of funds, and amount.

Founded in 2014 by Jonathan Levin, Jan Moller, and Michael Gronager, Chainalysis invests across Bitcoin, Bitcoin Cash, Ether, Litecoin, and other top cryptocurrencies.

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The 75-person startup, which has offices in New York, Washington DC, and Copenhagen, provides financial institutions, cryptocurrency exchanges and law enforcement with a platform to detect and investigate cryptocurrency money laundering, fraud, and compliance violations.

Chainalysis is also selling its bitcoin-tracing technology and compliance software to banks and brokers to monitor and link digital identities to cryptocurrencies.

Enormous regulatory overhead

The cross-border and stateless nature of cryptocurrencies throws up different challenges to regulators, even if they decide to devise formal guidelines to govern the asset class. As such, digital assets operators, including crypto exchanges, are increasingly turning to compliance solutions to help provide background checks on their customers as they find themselves under increasing scrutiny from regulators over possible violation of securities and AML rules.

Commenting on the news, John Dempsey, VP Product at Chainalysis, said: “As lawmakers and regulators focus their attention on the industry, it is more critical than ever that cryptocurrency businesses demonstrate compliance best practices. Every minute counts when managing exposure to sanctioned entities, hacked funds, darknet markets, and other illicit activities, which is why Chainalysis is investing in fast, actionable alerts to help our customers mitigate risk across cryptocurrencies.”

Michael Breu, Gemini’s Chief Compliance Officer, also noted: “As a New York Trust company we are required to monitor transactions on and off our platform. Tools like KYT alerts, which provide real time and ongoing blockchain analysis, coupled with Gemini’s own compliance policies, help us meet our regulatory obligations.”

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