The tool they're using to do it comes from blockchain compliance software provider Chainalysis, the program is called "Know Your Transaction" and it scans all incoming and outgoing transactions in real time for anything suspicious, and flags those transactions for review.
As everyone in the cryptocurrency space prepares for it mainstream, having a clean image is important - wether you're dealing with Wall Street firms jumping in, or governments considering new laws.
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users” says Jonathan Levin, Co-Founder of Chainalysis.
Binance CFO Wei Zhou explains their reasons for implementing the software “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.”
This same software has been in use by the IRS since 2015, but the IRS has admitted one thing that's frustrating them - they still can't track privacy coins, where there is no transparent blockchain to monitor.
With this in mind it's hard to say what the result of this will be. A crackdown on illegal crypto activity? Or simply a move that will push criminals away from Bitcoin and Ethereum, and towards coins built for private transactions?
Author: Adam Lee
Asia News Desk
