Nearly a decade after the arcane origins of cryptocurrency and skeptics would not yet have depleted their argument that the technology is an A-grade digital detergent for money-laundering. In a bid to tackle the age-old assertion, however, Binance has joined with crypto compliance and investigation provider Chainalysis to keep its transcontinental ecosystem squeaky clean.
The new tie-up revealed in a press release Wednesday is a joint effort to tackle “global cryptocurrency money-laundering”, and break down the barriers found at the “intersection of cryptocurrencies, regulators, and traditional financial institutions.”
Backed by Wall Street investment banking heavyweight, Benchmark, Chainalysis in April secured $16 million in VC funding in a mounting push to further its coverage to government entities, cryptocurrency businesses and financial institutions, worldwide — whom the company currently claims to serve more than 150 of, globally.
With offices in New York, Washington DC, and Copenhagen, Chainalysis would presumably be no stranger to the sheer height of some regulatory hurdles. Reflecting on some of the challenges that tails the crypto industry across borders, Chainalysis Co-Founder and COO, Jonathan Levin, surmised:
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users, We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions.”
The new partnership sings in harmony with the ambitions of Binance CEO Changpeng Zhao, who in September stated his curveball intention to set up five to ten fiat-to-crypto exchanges in nearly every continent — giving preference to smaller, more collegial, regulatory environments that could work directly with his ever-expanding team.
Now with its global campaign map firmly in hand, Binance would be looking to get a running start with Chainalysis’ full suite of tools — which purportedly helps crypto businesses and financial institutions comply with Anti-Money-Laundering (AML) and Know-Your-Customer (KYC) regulations — and companies accepting cryptocurrency to open banks accounts.
Know Your Transaction
The wheels have already been set in motion, with Binance, the world’s leading exchange by daily volume, having implemented a complete roll-out of Chainalysis’ compliance solution — an algorithmic ‘Know Your Transaction’ (KYT) software designed to weed out and sound the alarm on suspicious transactions.
To Binance CFO Wei Zhou, a former Wall Street financial management executive, stomping out any funny business is a surefire prerequisite to global expansion. The ex-Goldman Sachs investment banker stated:
“By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth, Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve.”
Indeed, as the exchange keeps at its seemingly relentless growth trajectory — having outstripped the profits of Deutsche Bank in Q1 — it will surely be looking to build an impenetrable defense against the type of legal action that may floor even the most well-heeled of companies.
Whatever efforts are made to pull the rug out from prospective launderers, however, may do little to diminish the narrative that cryptocurrency is criminal money. As reported previously by CryptoSlate, critics have continued to lambast the asset class despite hard evidence that, each day, banks launder enough to dwarf the net sum of funds ever laundered on cryptocurrency exchanges.
Cover Photo by Christine Roy on Unsplash
Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.