BNY Mellon to Monitor Crypto Transactions
According to a blog post by Chainalysis, the collaboration with BNY Mellon will see the latter integrate the firm’s compliance software into its multi-asset digital custody and administration platform. The financial institutional giant first announced the venture in February 2021.
The Chainalysis software suite will help BNY to better understand the crypto market and further build out their compliance framework. BNY Mellon’s partnership with the blockchain analysis firm will give the bank access to the company’s KYT (Know Your Transaction), Reactor, and Kryptos applications.
Chainalysis KYT helps monitor crypto transactions in real-time and detect high-risk activity. Chainalysis’ investigative tool, Reactor, lets analysts dig deeper into suspicious crypto transactions. Kryptos provides information and services around benchmarking and transaction volumes.
Commenting on the partnership between both parties, co-founder and Chief Strategy Officer of Chainalysis, Jonathan Levin, said:
“BNY Mellon is the best of both worlds: it has the reputation of being one of the world’s most trustworthy banks while fostering an innovative and forward-thinking culture. We are proud to collaborate with them as they launch their digital assets business.”
Caroline Butler, the bank’s Global Head of Custody, Tax and Network Management, also said of the collaboration,
“Chainalysis and other leading fintech providers is foundational to our role as a trusted innovator and the extension of our capabilities into products that serve the growing cryptocurrency market.”
Leveraging Crypto Forensic Firms to Ensure Compliance and Safety
Apart from BNY Mellon, more financial institutions (and crypto companies) have begun to integrate firms like Chainalysis and CipherTrace into their operational technology stack.
Cryptocurrency surveillance is now a necessary component of know-your-customer (KYC) and anti-money laundering compliance.
In December 2021, U.S.-based trading platform Robinhood integrated Chainalysis KYT and Chainalysis Reactor software solutions into Robinhood Crypto to fulfill compliance requirements and boost customer confidence.
Apart from private companies, regulatory agencies are also working with cryptocurrency forensics experts. Back in 2020, the Internal Revenue Service (IRS) awarded a contract worth $650,000 to Chainalysis, to develop a tool for tracking privacy coins like Monero.
Chainalysis secured $100 million in a Series E funding round in June 2021 led by Coature, which brought the company’s valuation to $4.2 billion, more than double the value realized three months prior. The firm also expanded its long-term partnership with cryptocurrency custody firm New York Digital Investment Group (NYDIG) to buy Bitcoin.
In September 2021, Mastercard agreed to acquire CipherTrace, another crypto intelligence firm, for an undisclosed amount. According to the President of Cyber Intelligence at Mastercard, Ajay Bhalla:
“With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this.”