One such company is Binance, the world’s leading cryptocurrency exchange by volume. The company today announced a partnership with regulation technology company Coinfirm, which Binance claims will help it comply with new anti-money laundering (AML) regulations set forth by the Financial Action Task Force (FATF).
The regulations in question, per the FATF website, involve countries “mitigating their risks” when it comes to virtual currencies. This means monitoring crypto exchanges and firms associated with digital assets, i.e. service and license providers, and implementing the appropriate sanctions should these enterprises fail to comply.
Earlier this year, the FATF issued guidance regarding the hotly debated “Travel Rule”—a new agreement among its 37 member nations that places strict new compliance measures on “virtual asset service providers” (VASPs), including cryptocurrency exchanges like Binance. The rule requires crypto exchanges to collect data regarding their customers’ transactions and share that information with each other when clients move funds between companies.
According to a statement from Binance, Coinfirm’s “blockchain agnostic” platform will provide its exchange with alerts and an investigation system that will allow it to examine any transactions that appear suspicious. Binance can then, in theory, make decisions regarding these transactions and potentially stop attempts at money laundering and other financial crime before they can occur.
“Coinfirm and Binance have mutual values in ensuring trust and security for cryptocurrencies, and we are confident in bringing that to the market together,” Pawel Kuskowski, co-founder and CEO of Coinfirm, said in a statement.
This is far from the first time that Binance has made an announcement regarding a new partnership aims at strengthening its ability to comply with relevant regulations.
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Most recently, the crypto exchange teamed up with the Silicon Valley-based, blockchain security firm CipherTrace, which has been very vocal about the need for exchanges to prepare for the FATF’s new Travel Rule. It’s unclear how Coinfirm’s intergration will affect Binance’s current relationship with CipherTrace, if at all.
By integrating its platform with Coinfirm, Binance is also looking to pave a (compliant) road toward wider crypto adoption, according to Binance CCO Samuel Lim.
“With new and more expansive AML and regulatory standards being put in place across the globe and governmental bodies such as the FATF placing new rules on the market in order to ensure sustainable growth, we are looking forward to our collaboration,” Lim said.
Binance currently operates in more than 180 countries and provides more than 1,200 different cryptocurrencies for investors to buy, sell and trade.