Cybersecurity firm Chainalysis is unveiling its new compliance platform for Bitfinex, one of the world’s leading and most popular cryptocurrency exchanges.
Chainalysis and Bitfinex Working Together
The platform is designed to detect money laundering before it can occur and monitor any illicit activity that some customers may be looking to perform with cryptocurrency’s help. White-collar crimes like these have long been serious concerns of politicians like those in the United States Congress.
Last October, Mark Zuckerberg – the head honcho of Facebook – was questioned before a Senate committee regarding the company’s latest cryptocurrency project Libra, and how executives planned to prevent activity such as money laundering and protect users’ private financial information.
Jason Bonds – the chief revenue officer of Chainalysis – commented in a statement:
Bitfinex is known as a destination for cryptocurrency traders seeking liquidity across various cryptocurrencies, and that volume requires an automated blockchain analysis solution in order to comply with regulations across the world. We are thrilled to work with Bitfinex as we mutually invest in supporting multiple cryptocurrencies.
Some might argue that Bitfinex is the perfect exchange to test out such new compliance methods. The company has been under fire for the past several months following a report co-written by University of Texas finance professor John Griffin that alleges Bitfinex was at the center of the bitcoin manipulation in 2017 that took the world’s leading cryptocurrency asset to almost $20,000 per coin.
The person responsible for the manipulation, according to the report, held a Bitfinex account and was likely a whale, which means they held an exorbitant amount of crypto in their wallet. The company ultimately rejected the report, saying it was based on “false evidence” and that the entire analysis was built on a “house of cards.”
At the time, Bitfinex wrote:
The purported conclusions reached by the authors are built on a house of cards that suffers from the absence of a complete dataset.
In addition, Bitfinex – according to another source – is allegedly suffering from low token volumes, which are down by approximately ten percent since the beginning of the year. This comes at a time when the exchange has added several new digital assets to its trading list, including Ethereum (ETH), Litecoin (LTC) and bitcoin cash (BCH).
A Happy Time for All?
Still, there seems to be excitement rolling through the halls of both Bitfinex and Chainalysis, with the former’s chief compliance officer Peter Warrack explaining:
Chainalysis is a top-of-the-line, comprehensive and privacy-safe compliance solution aligned with what we were seeking to keep bad actors off our platform, while protecting the privacy of our users. The solution does not share information identifying users, which is kept strictly in-house. We are excited to work alongside the Chainalysis team to continue to build out a safe and robust platform for our users.