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Chainalysis launches compliance solution for Bitfinex amidst class-action lawsuit

Chainalysis has launched a compliance solution software for Bitfinex that aims to identify suspicious funds and eliminate illicit activities that may be lurking within the exchange.

Image: Chainalysis Facebook

Fri, 13 Dec 2019, 03:23 am UTC

Blockchain analysis firm Chainalysis has announced that it has rolled-out its global anti-money laundering compliance solution for crypto exchange Bitfinex, which is currently embattled in a class-action lawsuit. The solution will help the exchange monitor and analyze any suspicious activities that are happening within its system and track down the provenance of questionable funds, a press release said.

Called the Chainalysis KYT (Know Your Transaction), the software provides real-time tracking of transactions and categorizes them based on risk factors. This allows Bitfinex and authorities to quickly stomp out illicit activities in the exchange, ultimately increasing the customer and regulator trust.

Bitfinex – along with cryptocurrency Tether – has been accused by multiple parties of manipulating bitcoin prices that caused the massive bull run in 2017. Both entities have adamantly denied the accusations and is willing to contest the allegations in court, adding that they will not make any settlement whatsoever.

Scandal after scandal

“To be clear, there will be no nuisance settlements or settlements of any kind reached. Instead, all claims raised across both actions will be vigorously contested and ultimately disposed of in due course. Once they are, Bitfinex and Tether will fully evaluate their legal options against those bringing and promoting the baseless claims,” the exchange said.

Meanwhile, Bitfinex is still trying to acquire the $880 million that is owed by Crypto Capital – its payment processor. But that’s increasingly becoming difficult since funds of the payment processor have been frozen by authorities due to accusations that it laundered money for a Columbian Cartel.

The investigation has landed Crypto Capital Ivan Manuel Molina Lee behind bars, while Crypto Capital Principal Oz Yosef was indicted on three criminal counts by U.S. authorities. Bitfinex said that it wasn’t in collusion with Crypto Capital regarding the aforementioned money laundering as it’s also a victim of the payment processor.

Clearing its name

Moving forward, it appears that Bitfinex wants to clean its name and this partnership with Chainalysis is one of the steps it’s taking to achieve that goal. Commenting on the collaboration, Bitfinex Chief Compliance Officer Peter Warrack said that Chainalysis is the perfect candidate to eliminate criminal activity in the exchange and increase security for its clients.

“Chainalysis is a top-of-the-line, comprehensive and privacy-safe compliance solution aligned with what we were seeking to keep bad actors off of 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,” Warrack said.

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