Tezos and Algorand Latest to Integrate Tech for Anti-Money Laundering Compliance

Tezos and Algorand Latest to Integrate Tech for Anti-Money Laundering Compliance

Credit: Andrii Spy_k/Shutterstock

Two blockchain platforms, both proof-of-stake, are trying to stay on the right side of the Financial Action Task Force’s (FATF) “Travel Rule.”

In separate announcements on Thursday, the Algorand and Tezos Foundations said they had linked up with two analytics companies, Chainalysis and Coinfirm, respectively, to help bake regulatory compliance into their eponymous blockchains.

It’s been very nearly a year since the Financial Action Task Force (FATF), the global anti-money laundering (AML) watchdog,for nations to stipulate that crypto companies must store and disclose information about senders and receivers, above a certain transaction threshold.

In Algorand’s case, Chainalysis will provide a know-your-transaction (KYT) solution, allowing its foundation to monitor large volumes of on-chain activity for the native ALGO token and report any suspicious transactions to the authorities.

While Algorand emphasizes that the new integration will enhance trust and security, the specter of regulation is never too far away. As it says in a press release, the new integration will enable the foundation to “fulfill their regulatory obligations to report suspicious activity.”

In a statement, Fangfang Chen, the Algorand Foundation’s chief operating officer, said the integration would allow it to meet regulatory requirements in Singapore. “We needed a compliance partner that could not only help us adhere to regulations in Singapore where we are based but also global regulatory best practices,” she said.

Over the past 12 months, some national regulators have transposed FATF’s “Travel Rule” into local law. The U.S’ Financial Crimes Enforcement Network (FinCEN), one of the first regulators to implement the Travel Rule back in May 2019, has continued with a minimum threshold of $3,000.

Singapore that parties involved in crypto transactions worth more than 1,500 Singapore dollars (around US$1,100) would have to be ready to disclose identities.

Chainalysis told CoinDesk that while the integration was not a “comprehensive solution to Travel Rule compliance,” it would help the Algorand Foundation meet some of the requirements, including picking out transactions that trigger the Travel Rule, as well as identifying relevant senders and receivers.

“FATF’s guidance states that automated transaction monitoring and customer risk scoring are essential components of an effective anti-money laundering program,” a spokesperson said in an email. “Chainalysis provides the transaction monitoring software required to hold a license in Singapore and comply with regulatory requirements in other FATF jurisdictions.”

Digital Dollar? Get Real, Financial Inclusion Advocates Tell Congress

Previous

Japan’s High Court Rejects Former Mt Gox CEO’s Conviction Appeal

Next

More