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Chainalysis, Paxful announce partnership to create new compliance standard for P2P crypto exchange

Image by Paxful

Wed, 25 Mar 2020, 14:13 pm UTC

Blockchain analysis company Chainalysis and Paxful, a global peer-to-peer (P2P) Bitcoin marketplace announced in a joint press release that they are working together to raise the bar for P2P exchanges compliance standards.

Paxful will use Chainalysis KYT (Know Your Transaction) to monitor its platform’s cryptocurrency transactions in real-time and Chainalysis Reactor to build investigations when it detects suspicious activity.

Chainalysis Reactor is used to investigate dubious transactions and provide detailed reporting to regulators and law enforcement on criminal activities including fraud, extortion and money laundering on the blockchain.

The Chainalysis’ tools will strengthen Paxful’s compliance expertise and set a new compliance benchmark for P2P crypto exchange worldwide.

“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.”

Chainalysis deemed all P2P cryptocurrency exchanges as inherently risky because they are decentralized and don’t require users to set up an account. However, Paxful sets a new precedent for P2P exchanges and leads Chainalysis to improve its policy and evaluate P2P exchanges on a case-by-case basis before labeling them as risky.

“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.”

With its partnership with Chainalysis, Paxful is ready and equipped to develop new controls, protect the customers, and identify high-risk transactions. It will block outgoing activities to high-risk addresses that are associated with terror financing, sanctioned addresses, child abuse websites, and stolen credit card platforms.

In February, crypto exchange CoinField announced its partnership with Chainalysis. The two firms decided to join forces to prevent money laundering.

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