The analysis company Chainalysis has announced the rapid launch of two major sanction tools that will be available free of charge to the crypto industry.

According to a report shared by Chainalysis on Thursday, the verification tools include two key components of a new tracking program that will help exchange portfolios and transactions for activities that appear to circumvent financial sanctions. The first tool available immediately is the network oracle.

An on-chain oracle is a smart contract specifically developed for decentralized finance projects (DeFi). Checks if the cryptocurrency wallet address is included in the sanction assignment. This means that all wallets on the financial sanctions lists provided by the US, EU and UN will automatically be available to anyone using Oracle.

The second tool, which will be launched next month, is the Application Programming Interface (API). The API uses the same data as the network oracle to check if the wallet is on any sanctions list. However, it is intended for use in a variety of applications, including centralized crypto exchanges and mobile user interfaces.

Speaking about the importance of transparency in cryptocurrencies, Chainalysis co-founder and CEO Michael Gronager said in a statement:

“Now is the time for industry to prove that the blockchain’s inherent openness makes cryptocurrencies a powerful deterrent to evading sanctions.”
He added that Chainalysis has accelerated the development of its screening tools and will provide them for free to anyone in the crypto industry.

“In anticipation of ongoing sanctions, we prioritize the development of these tools to ensure that all crypto-market participants have what they need to take advantage of this transparency and conduct basic sanctions checks for free.”
Related topics: BNY Mellon Collaborates with Chain Analysis to Track Users’ Cryptocurrency Transactions

Chainalysis continues to emphasize that it will focus more on monitoring and verifying transactions in the growing DeFi sector.

“Many of the decentralized protocols and systems that have become increasingly popular in recent times do not include tools for effectively managing sanction risk.”
Currently, users of DeFi platforms can operate more anonymously than centralized exchanges, which tend to have stricter identity verification protocols and strict Know Your Customer or KYC requirements.

The US cryptocurrency platform Coinbase has supported the idea that the inherent openness and public nature of cryptocurrencies can help governments enforce sanctions.

While traditional fiat currencies allow attackers to use shell companies, tax havens and opaque ownership structures to “hide the movement of funds”, cryptocurrencies are mainly public and traceable, helping authorities “detect and prevent evasion”, the chief said. Coinbase Legal Advisor. so. Paul Grewal on his blog earlier this week.

Source: CoinTelegraph

LEAVE A REPLY