The New York State Department of Financial Services (NYDFS) published a letter which recommended crypto firms working in the state to use blockchain analytic tools and services.
The agency wrote, “Wallet addresses are typically pseudonymous, with nothing on the face of the transfer tying back to the originator, beneficiary, or underlying beneficial owners.”
According to NYDFS, it is crucial that crypto firms use blockchain analytics to restrain unlawful transactions, such as money laundering or terrorism financing.
The agency also provided three analytical processes that may help fight such measures. These include Know Your Customer (KYC), managing transaction monitoring of on-chain activity, and regulating sanctions screening of on-chain activity.
“VC Entities must have clearly documented policies, processes, and procedures with regard to how the blockchain analytics activity integrates into the VC Entity’s overall control framework consistent with the VC Entity’s risk profile” the NYDFS said.
Simultaneously, USA based exchange company, Coinbase, introduced Coinbase Intelligence today which will provide regulatory authority compliance measures and risk mitigation features.