Blockchain analysis company Chainalysis has joined hands with peer-to-peer (P2P) marketplace Paxful to create a safer, stronger trading platform for those looking to exchange or trade cryptocurrencies in the future.
Chainalysis and Paxful… The Perfect Match?
With so much theft and malicious activity occurring throughout the crypto space over the past few years, many companies like Chainalysis realize that while digital assets are here to stay and edging closer to mainstream territory, they don’t possess the security features necessary to keep them in play. That’s why, after 12 long years, bitcoin is still considered a purely speculative asset by some rather than a legitimate currency that can be used by businesses or individuals alike to pay for goods and services.
Peer-to-peer marketplaces can also be very risky in that traders, buyers and sellers are never fully clear on who they’re doing business with. That’s why many exchanges and platforms have sought to instill know your customer (KYC) tactics that ensure every party engaged in a trade is who they say they are, and nobody has reason to worry about where their money is going or where it’s coming from.
Chainalysis is helping Paxful reach a whole new level of compliance that will place it at the forefront o the P2P market. The moment suspicious activity is discovered, Paxful security experts engage in a hardcore investigative process designed to give them the answers they need quickly. From there, they can snuff out the suspicious parties and ensure all trades or corresponding accounts are suspended to prevent further damage.
In a statement, John Dempsey – vice president of product at Chainalysis – commented:
Compliance is the key factor for establishing trust in cryptocurrency exchanges. By adopting a case-by-case approach to evaluating P2P venues, we are helping to broaden trust and transparency across the cryptocurrency ecosystem.
Lana Schwartzman – chief compliance officer at Paxful – explained why her company chose Chainalysis as the compliance firm to work with and ensure traders were in the right frame of mind:
At Paxful, compliance and security are top-of-mind as we work to keep the marketplace free from fraud and scammers. 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 Tools Are in Place
Among the aspects that Chainalysis will be keeping its eyes on with Paxful include outgoing transactions to what it’s calling “high-risk addresses.” These are usually those linked to terrorist financing, stolen credit card platforms or other illicit sites. Due diligence will also be in place, allowing the company’s security team to focus on the largest or most urgent circumstances.
Paxful will also utilize a tool called Chainalysis Reactor, which will comprise detailed reports of suspicious activity to be forwarded to the appropriate regulators or legal bodies.
