Chainalysis Teams With Paxful To Improve P2P Crypto Exchange Security

News | March 24, 2020 By:

Blockchain analysis company Chainalysis has teamed with peer-to-peer (P2P) bitcoin marketplace Paxful to create a new compliance standard for P2P cryptocurrency exchanges.

Founded in 2014, Chainalysis offers crypto investigation and compliance solutions to global law enforcement agencies, regulators, and businesses as they work together to fight illicit cryptocurrency activity. Its crypto transaction monitoring tool, Chainalysis KYT, is designed to automate the assessment of money laundering risk, thereby helping cryptocurrency businesses and financial institutions to meet regulatory requirements. The tool is being used by more than 100 crypto businesses and financial institutions in 36 countries.

Paxful is crypto trading platform that aims to bring financial inclusion to the underbanked and unbanked through P2P finance. Every customer gets a free digital wallet that lets them send, receive, and store bitcoin. They’re cutting out the middleman with their secure escrow service and provide help to their customers with a 24/7 customer support system.

Under the partnership, Paxful will use Chainalysis KYT to monitor its platform’s crypto transactions in real-time and Chainalysis Reactor to build investigations when it detects suspicious activity. These tools will reportedly amplify Paxful’s compliance expertise and set a new compliance benchmark for P2P cryptocurrency exchanges globally.

“At Paxful, compliance and security are top-of-mind as we work to keep the marketplace free from fraud and scammers,” said Lana Schwartzman, Chief Compliance Officer at Paxful. “Partnering with Chainalysis was a great choice as we work to protect our users and instill in them the importance of regulation and compliance on P2P marketplaces like ours.”

The Chainalysis partnership will enable Paxful to develop new controls for customer protection, including blocking outgoing transactions to high-risk addresses linked to terror financing, sanctioned addresses, child abuse websites, and stolen credit card platforms. According to Paxful, their compliance capabilities will continue to expand as they continue to complete additional risk assessments in the coming months.

“Compliance is the key factor for establishing trust in cryptocurrency exchanges,” said John Dempsey, VP Product, Chainalysis. “By adopting a case-by-case approach to evaluating P2P venues, we are helping to broaden trust and transparency across the cryptocurrency ecosystem.”