The blockchain analytics firm is urging crypto companies to make compliance a top priority as regulators increase the demands on virtual asset providers.
The rise of Bitcoin in 2020 has led to an influx of cryptocurrency businesses as advanced product features enter the market, as well as new blockchain chains, tokens and DeFi protocols. All of these startups must comply with the regulatory requirements of the country in which they are based.
Crystal Blockchain states that 2021 is turning into an important year and recommends that crypto service providers implement compliance measures that meet government requirements and due diligence. All of this comes after the Financial Action Task Force (FATF) issued warning indicators for virtual asset providers in September.
These warning flags are designed to help VASP detect illegal activities that involve cryptocurrencies and include users with an unusual profile who suddenly engage in unusual activity such as large transactions or transfers that are split into many sections below the reporting threshold.
Many jurisdictions and exchanges around the world have been slow to adopt the FATF guidelines, which has led some experts to warn that compliance with industry requirements could take years. This is partly due to technical issues related to implementation. However, there are tools that are designed to make this process easier for VASP.
Crystal says the encryption software supports all the critical features of the current market, which means red flags can be quickly identified. It has its own algorithms that link risk assessments to real-time transactions, even before the block is confirmed by the network. This means that payments awaiting confirmation can also be scanned into a memo. The company’s manufacturer also constantly monitors legislative changes, researches cryptocurrencies and phishing, and automatically monitors international cash flows 24/7.
Keep VASP updated
Virtual Service Providers using the Crystal infrastructure receive a list of tens of thousands of blacklisted addresses and help ensure that cryptocurrencies – and the accounts in which they are stored – are recognized when connected to compatible ecosystems.
According to the company, the cryptocurrency survey tracking system is the first of its kind in the world. This tool automatically detects cryptocurrency filtering points and identifies all hop addresses that were used along the way. Crystal added that this feature is especially useful for investigators trying to thoroughly investigate where the stolen coins ended up, and for those trying to find specific links to real institutions.
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The intelligence company says the top priority has been to offer a range of products at competitive prices and ease of use, despite the advanced features offered. Over the past two years, the tools have been constantly improving. Executives said Crystal Expert – its flagship subscription package – has been regularly praised for its ease of use, with great emphasis on removing redundant and unnecessary features.
“All of these tools, coupled with excellent customer support, make Crystal Blockchain the preferred analytics platform for crypto compliance officials and risk management for service providers,” the company added.
To build a better industry
In October, Crystal said it now provides coverage in 70 countries to over 2,500 service providers. In addition to providing a service that can help VASP comply with the regulatory requirements set by the FATF, it enables European platforms to fulfill the obligations set out in the EU’s Fifth Anti-Money Laundering Directive.
Crystal supports a wide range of cryptocurrencies and tokens including Bitcoin, Bitcoin Cash, Tether, Litecoin, Ethereum, ERC-20, ERC-721, and XRP. After a product update in late October, Crystal can now support over 1,500 ERC-20 tokens. This includes over 60 DeFi tokens, including yearn.finance, Uniswap, and Wrapped Bitcoin.
Crystal regularly publishes reports that also highlight the current state of the crypto sector. In May, the company showed that the dollar value of bitcoins transferred between darknet devices and other institutions increased 65% in the first quarter of 2020 over the previous year.
The industry is picking up steam and VASP’s regulatory commitment is growing. Financial institutions that don’t meet the latest requirements may end up falling behind.