Bittrex, a cryptocurrency exchange based in the United States, has adopted a new compliance tool for its product. According to the executives of the company, the new tool, which was created by Chainalysis, can be used to monitor and flag suspicious transactions on the exchange.
Chainalysis KYT (Know Your Transaction), this new piece of software can track transactions made on the platform with several currencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash and others.
The company has chosen to adopt this technology because several regulators around the world are becoming concerned about how crypto exchanges regulate their own activities. The Financial Action Task Force (FATF), for instance, gave 12 months to the exchanges of it's member countries to adapt and improve their procedures.
According to Bittrex, the technology will help it to become compliant with the local legislation at the same time that the company is able to go even forward and to create a database of all suspicious activity.
Representatives of the company confirmed that all addresses related to dark net sites and child exploitation sites, for instance, will be flagged. The information may then be shared with the authorities if necessary.
The Chief Security Officer of the company, Jonathan Levy, affirmed that this would also help in the automation of the company’s review process. This would be needed to scale it as the company is growing and it gets harder do it manually.
Exchanges with high volumes can benefit from this as they still need to monitor their transactions and it becomes harder to do so when their business becomes more popular.