Chainalysis, the leading provider of cryptocurrency compliance and investigation solutions, today announced the launch of Chainalysis Know Your Transaction (KYT) for stablecoins, a real-time anti-money laundering (AML) compliance solution for monitoring stablecoins across every transaction through their full lifecycle, including issuance and redemption. Chainalysis KYT is the first solution of its kind to be applied to stablecoins, cryptocurrencies designed to minimize price volatility, usually by pegging or backing their value to other assets. The move signals the company’s commitment to providing market-leading compliance technology across a comprehensive suite of cryptocurrencies and tokens, and comes at a time when stablecoins are rapidly growing in popularity, with over $3 billion in market value.
“Chainalysis exists to build trust in cryptocurrencies among institutions and users,” said Jonathan Levin, COO, Chainalysis. “The repeated knock against cryptocurrency is its volatility, and trust in stablecoins could lead the way to increased commercial use. Chainalysis KYT for stablecoins further supports this vision by raising the bar for accountability and providing compliance teams with the technology they need to meet AML requirements.”
Traditionally, it was difficult for cryptocurrency businesses to enact proper AML controls, making it challenging to establish banking relationships and exposing them to regulatory and reputational risk. Chainalysis KYT enables them to monitor large volumes of cryptocurrency activity and identify high risk transactions on a continuous basis. Now stablecoin issuers can also meet higher AML compliance standards that support broader adoption.
Paxos Chief Operations Officer Andrew Chang said, “We created Paxos Standard (PAX) as a stable, digital currency that can be used for payment on transactions around the world. That’s why it was key for us to find a partner that could automate the process of screening for illicit activity. Chainalysis KYT is the first solution that can screen PAX transactions. Since PAX is the first regulated stablecoin, it’s important that we operate responsibly, reduce risk exposure for our entire ecosystem, and maintain the integrity of our stablecoin.”
“Working with Chainalysis helps us set a new standard for trust in the marketplace,” said Alex C. Levine, Chief Regulatory Officer and Head of Legal at TrustToken. “Chainalysis KYT not only provides important AML checks, but also strengthens our banking relationships, which ultimately enables us to be transparent with our customers about our holdings and show one-to-one parity with our TrueUSD token and the US dollar.”
Chainalysis KYT applies global AML standards to each transaction across all users within an organization’s user base. Stablecoin issuers can integrate with Chainalysis KYT via an API to immediately begin monitoring large volumes of activity and identify high risk transactions on an on-going basis. They can also leverage the user interface to quickly understand the risk profile of each stablecoin holder with the latest data and filter them by level of risk exposure to identify those that require the most immediate attention.
Chainalysis KYT is now available select for ERC-20 stablecoins, and will become available for additional tokens in the coming months.
