Last week we wrote about how scammers love to target cryptocurrency because of its anonymity and digital nature. This week, we want to talk about how our partnership with Chainalysis can help offer more security on our exchange.
What is Chainalysis?
Chainalysis provides comprehensive cryptocurrency investigation and transaction monitoring solutions to more than 270 organizations in 45+ countries. They provide blockchain data and analysis to government agencies, financial institutions, and exchanges to help their customers understand what’s happening on the blockchain.
As a cryptocurrency exchange, CoinField must comply with government regulations. We partnered with Chanialysis in February to help with our compliance and access their Know-You-Transaction (KYT) and Anti-Money Laundering (AML) solutions.
Chainalysis’ KYT solution monitors every transaction on our exchange in real-time. It detects risky patterns such as darknet markets, scams, sanctioned addresses, and abnormal transactions. Should any illicit activity occur, we will receive real-time notifications about it. The KYT API will prevent withdrawals from blacklisted addresses and freeze deposits from hacks and scams.
While illicit activity on blockchains is a small percentage of overall activity, the value of such crypto transactions is a large amount. A representative from Chainalysis said,
He added: “The good news is, the very fact that we can quantify and investigate crypto crime so effectively demonstrates cryptocurrency’s inherent transparency. This kind of analysis would never be possible in fiat currency, but it is in cryptocurrency (with the right tools, of course) since every transaction goes into a public ledger. We hope to raise awareness of cryptocurrency’s built-in transparency, prompting reputational gains for the industry and, ultimately, more mainstream adoption.”
Sadly, not all countries have created guidelines or laws to protect crypto exchanges and customer funds. It means unregulated exchanges are often, but not always, a target. Some crypto exchanges that lost funds in 2019 due to hackers include:
- DragonEx, a Singapore-based cryptocurrency exchange that lost $7 million
- Binance, which lost $41 million in May 2019 due to phishing attacks
- Bithumb, a South-Korean exchange that lost $19 million, which was allegedly the work of an insider
- GateHub, a UK exchange which lost $10 million in XRP
- Cryptopia, a New Zealand-based exchange that had $16 million stolen
- CoinBene, a Singapore-based exchange that lost $105 million just two days after the hack attack on DragonEx
If more countries offer regulations and guidance, it means more exchanges will take necessary compliance and security steps to safeguard their customers’ funds. Our partnership with Chainalysis shows our commitment to compliance, transparency, and blockchain technology. We want people to have trust in it, and Chainalysis offers solutions that can build this trust. This will help facilitate the adoption of cryptocurrency globally.
“CoinField’s mission to make cryptocurrency more accessible globally complements our mission to build trust in blockchains,” said Jason Bonds, Chief Revenue Officer, Chainalysis. “We both believe compliance is critical to the mainstream adoption of cryptocurrency, and we look forward to partnering with CoinField to promote the safe use of cryptocurrencies globally.”
For more information about Chainalysis, visit its website.