New AML Tool For Stablecoins Launched By Crypto Surveillance Firm Chainalysis
One of the biggest names in crypto compliance and investigation solutions Chainalysis has recently announced that they are launching Chainalysis Know Your Transaction (KYT) for stablecoins. It is said to be a real-time anti-money laundering (AML) surveillance solution for stablecoins which keeps a record of every transaction through their full lifecycle.
They claim to be the first product of its kind. Chainalysis COO, Jonathan Levin said:
“Chainalysis exists to build trust in cryptocurrencies among institutions and users. 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.”
One might ask that stablecoins should not be of any particular use for people engaging in illicit behavior. After all, they are designed to be pegged to fiat currencies. However, they are being used as trading pairs for top cryptos. Through Chainalysis KYT, it is now possible to keep tabs on stablecoins through their entire lifecycle.
AML has been one of the biggest problems in crypto-based businesses. Both exchanges and banks can find the new tool by Chainalysis useful. With regulatory pressures building up on cryptos in all parts of the world, such tools are extremely useful and help secure the ecosystem slowly.
Executives of many stablecoins are eagerly waiting for this new product. Andrew Chang, the Chief Operations Officer at Paxos Trust Company, the issuer of stablecoin Paxos Standard (PAX) 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.”
Currently, stablecoins are available for some ERC-20 stablecoins, however, in coming months more tokens are expected to be added.