Blockchain analysis company Chainalysis is partnering with institutional digital-asset security specialist Fireblocks to integrate its Know Your Transaction (KYT) system to monitor crypto transactions within the platform.
According to an announcement on June 15, the addition will strengthen Fireblocks' security standards and Anti-Money Laundering (AML) compliance.
Strengthening AML compliance
KYT allows users to automatically screen transactions based on risk standards and ensure that non-approved trades aren’t executed without manual review. Speaking with Cointelegraph, Fireblocks CEO Michael Shaulov said:
“Compliance and security are two of the most important pillars of storing and transferring digital assets today. By integrating with Chainalysis KYT, Fireblocks is removing the regulatory obstacles that exchanges, lending desks, banks, liquidity providers and market makers face when moving crypto — ensuring that these institutions can be as secure and compliant as possible, all from the Fireblocks platform.”
Shaulov claims that in just 2019 alone, more than $4 billion worth of crypto was lost to fraud, misappropriation of funds, exchange hacks and thefts, leading the United States Department of the Treasury to declare digital assets to be one of the most significant illicit finance vulnerabilities.
Furthermore, the ability to more easily comply with AML standards could prove to be a cost-saving measure for companies in the space. A recent study by CipherTrace revealed that banks and traditional financial systems globally paid more than $6.2 billion in AML fines in 2019.
Looking ahead, Shaulov said that there are near-term plans to expand the Fireblocks Network through onboarding new institutions, offering support for new tokens, and integrating with new exchanges.
Recently, Fireblocks launched its Asset Transfer Network. The open network enables institutions to find and connect with peers and transfer assets on-chain while streamlining settlement and post-trade operations.