Chainalysis Develops Robust Crypto Trading Monitoring System for Bitfinex

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Blockchain analysis firm Chainalysis has announced the development of a crypto trading monitoring system for cryptocurrency exchange giant Bitfinex. The news comes amid calls by financial regulators in different jurisdictions for robust oversight of digital currency transactions.

Meanwhile, Bitfinex and Tether are still embroiled in different legal tussles most of which hinge on alleged manipulation of the bitcoin (BTC) price. Industry commentators are still divided on whether Tether (USDT) has played any significant role in deliberately shaping the BTC price action at any time.

Chainalysis Helping Bitfinex to be More Compliant

Chainalysis announced the roll-out of its bespoke crypto trading monitoring tool on the Bitfinex platform via a press release issued on Thursday (December 12, 2019). According to the press statement, the Chainalysis Know Your Transaction (KYT) tool will enable Bitfinex to monitor crypto trades to screen for suspected money laundering and other illicit financial activities.

An excerpt from the press statement reads:

“By leveraging Chainalysis KYT (Know Your Transaction), cryptocurrency businesses such as Bitfinex can monitor large volumes of cryptocurrency activity and identify high risk transactions on a continuous basis. Real-time alerting on the riskiest activity coupled with enhanced due diligence allow compliance teams to focus on the most urgent activity, enforce compliance policies, and better allocate resources.”

While the Chainalysis KYT provides robust crypto trading monitoring, the Bitfinex team is assuring customers of the utmost respect for their privacy. According to Peter Warrack, the Bitfinex chief compliance officer, “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.”

Earlier in the year, U.S. crypto trading giant Coinbase accused Chainalysis of selling user data obtained via its KYT tool. At the time, Chainalysis denied the allegations saying the tool only examines transaction data and had no interaction with private user details.

The move also represents an expansion of the trend of crypto trading platforms looking to combat money laundering. In October 2018, Binance also announced a rollout of the Chainalysis KYT.

Chainalysis Following Nasdaq’s Footsteps

For Chainalysis, partnerships with crypto trading behemoths like Bitfinex and Binance make for a more robust cryptocurrency exchange market, one that pays particular attention to compliance with international best practices. Also, multi-token platforms like Bitfinex and Binance can leverage the wide coverage of the Chainalysis crypto monitoring spectrum which already includes bitcoin and 41 altcoins.

Chainalysis might also present some competition for Nasdaq in providing cutting-edge security and regulatory compliance solutions for crypto trading platforms. As previously reported by Blockonomi, Nasdaq is working with seven different crypto exchanges, including Gemini, deploying its suite of market monitoring solutions.

Regulators Keen on Thorough Crypto Trading Monitoring Protocols

Meanwhile, financial regulators across the world continue to push for greater compliance with anti-money laundering (AML) laws. From Hong Kong to South Korea and even inter-governmental agencies like the Financial Action Task Force (FATF), the message remains the same — crypto exchanges must prioritize AML compliance.

These rules are even beginning to take an international turn with platforms having to abide by the FATF’s travel rule. However, smaller exchanges are finding some of these stringent measures to be overly burdensome.

In several countries, low volume platforms have been forced to shut down owing to the increasingly tougher regulatory climate. These exchanges are adding to the growing list of shuttered platforms which also includes crypto bourses forced to into bankruptcy by due to losses from hacking or other instances of missing funds.

The spotlight on crypto exchanges is a part of the general tightening of virtual currency laws with governments and central banks also looking to combat the spread of private stablecoin projects like Libra. Some nations are reportedly going ahead to create their own sovereign digital currencies.


Osato is a Bitcoin enthusiast who can often be found providing insight on the latest Bitcoin-related news. When he isn't closely monitoring stories in the industry, he is either attempting to beat his scrabble high score or internally debating some existential dilemma. Contact

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