Chainalysis Provides Compliance Solution for BITBOX, LINE’s Digital Asset Exchange

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BITBOX adopts Chainalysis anti-money laundering compliance solution in anticipation of global cryptocurrency regulation


Chainalysis, the blockchain analysis company, today announced the roll-out of its cryptocurrency compliance solution for BITBOX, the digital asset exchange operated by LINE, the mobile messaging platform. The need for stricter compliance operations for cryptocurrency businesses and social and messaging apps that expand into cryptocurrency is rising in anticipation of global regulatory guidance.

International regulation of cryptocurrency is quickly gathering pace. While jurisdictions like the United States have had regulatory expectations or requirements in place for years, any foreign organizations conducting “substantive” business with U.S. persons must comply with U.S. regulations. Further, the Financial Action Task Force (FATF), the inter-governmental body that sets global standards relating to anti-money laundering and combating the financing of terrorism (AML/CFT), will issue guidance this month for jurisdictions that fall under its oversight, which consists of over 180 countries including Japan and South Korea, to start regulating their virtual asset markets.  

Businesses like LINE understand that building a culture of compliance and implementing blockchain analysis technology from the beginning are crucial to operating a global regulated exchange. This proactive approach is key to industry growth and success.

“We have heard from regulators that blockchain analysis is an important part of an effective anti-money laundering solution, and will be a significant factor in cryptocurrency businesses’ ability to comply with global regulations,” said Jonathan Levin, Co-Founder and COO, Chainalysis. “Exchanges like BITBOX that implement these best practices ahead of regulatory evaluations will show a dedication to compliance.”

"Chainalysis’ compliance technology excels at meeting anti-money laundering requirements while also ensuring future best practices,” said Youngsu Ko, CEO of LINE Tech Plus, LINE. “By adopting Chainalysis KYT, BITBOX will provide safe and secure trading experiences while demonstrating our commitment to compliance.”

Chainalysis KYT (Know Your Transaction) applies global AML standards to each transaction across all users within an organization’s user base. The solution enables cryptocurrency businesses and financial institutions to monitor large volumes of cryptocurrency activity and identify high risk transactions on a continuous basis. They can also leverage the user interface to quickly understand the risk profile of each user with the latest data and filter them by level of risk exposure to identify those that require the most immediate attention. Chainalysis KYT is used by approximately 110 cryptocurrency businesses and financial institutions in 35 countries.

In light of global regulatory momentum, the appetite for cryptocurrency compliance solutions in Asia Pacific has grown substantially. Over the last year and a half, Chainalysis has more than doubled its client base in Asia Pacific and increased contracted revenue from clients there by more than 20x. In April, Chainalysis also secured a strategic investment from Sozo and MUFG to close out its Series B round at $36M, helping to provide critical market insights for customers in the region.


ABOUT CHAINALYSIS

Chainalysis offers cryptocurrency investigation and compliance solutions to global law enforcement agencies, regulators, and businesses as they work together to fight illicit cryptocurrency activity. Backed by Accel, Benchmark and other leading names in venture capital, Chainalysis builds trust in blockchains. For more information, visit www.chainalysis.com.


ABOUT LINE CORPORATION

Based in Japan, LINE Corporation (NYSE:LN/TSE:3938) is dedicated to the mission of “Closing the Distance,” bringing together information, services and people. The LINE messaging app launched in June 2011 and since then has grown into a diverse, global ecosystem that includes AI technology, fintech and more.


ABOUT BITBOX

Based in Singapore, BITBOX (bitbox.me) is a digital asset exchange operated by LINE Tech Plus, under both LVC Corporation and LINE Corporation. Launched on July 16, 2018, BITBOX focuses on providing a user-centered experience through first-rate customer support, along with the highest levels of security and transparency.

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Monitor transactions across the token’s full lifecycle, from issuance to redemption—and any transaction in between.

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How Transaction Monitoring Works at Chainalysis

One of the reasons Chainalysis KYT is so popular is that it uses global anti-money laundering (AML) standards common across regulatory bodies. We apply these standards when each transaction is screened.

Cryptocurrency businesses also need to understand the aggregate risk profile of each of their users. That’s why Chainalysis KYT provides a view of risk profiles at the user level, which reflects all of a user’s screened transactions. For example, if an organization has a user who receives funds from a darknet market, our software automatically flags that transaction as high risk. If the user sends funds to a regulated exchange, our software marks that transaction as low risk. And so on. Every screened transaction feeds into a user’s risk profile. Chainalysis KYT displays all user profiles, sortable by high, medium or low risk (using traffic light colors) for easy scanning.

We apply our risk methodology in real time to all users within an organization’s user base. This saves compliance teams from laborious, manual screening work. They can instead focus on developing comprehensive compliance programs. Organizations that work with us tell us this has enabled them to meet regulatory expectations and launch or grow their businesses.

Customizable risk level

We’re now giving our customers the ability to adjust the risk level of a category or a service. For example, not all jurisdictions around the world treat gambling the same way. In some countries, gambling is not considered a legitimate business activity and thus online gambling sites would be treated as high risk. In other countries, gambling is not considered illicit, which means properly licensed online gambling sites would be treated as low risk.

The ability to customize the risk level of categories and specific services means our customers can automate even more of their compliance workflows.

Organization-wide dashboard

One of the most useful facets of Chainalysis KYT is having a view of all users and their risk profiles directly accessible upon first logging in. It provides a visual alert of which users have high risk profiles and therefore require the most immediate attention. In keeping with the spirit of simplified visual cues, we have now launched a dashboard that summarizes key indicators at the total organization level. For example, organizations can now see what percentage of their user base is falling under high, medium or low risk. They will soon be able to see things like total exposure by category, or total transaction volume per day. These and other metrics will provide our customers additional understanding of their organization’s total exposure trends over time.

In-app chat

At Chainalysis, we strive to provide as much support to our customers as we can. To make it easier to interact with us, we added in-app chat to Chainalysis KYT. This allows our customers to send us questions or feedback without having to leave the environment. Our team typically responds within minutes.

Looking ahead

We know software is most valuable when it makes the lives of our customers easier and more productive. This means we’ll continue to add intuitive capabilities to our compliance products while increasing versatility for ongoing transaction monitoring. In the coming months, we will improve how transaction information is displayed. We will also boost our monitoring capabilities for other cryptocurrencies beyond Bitcoin. And we will deepen the integration with Chainalysis Reactor, which is used for enhanced due diligence and investigations.

The momentum around cryptocurrency compliance is only just starting and we look forward to continuing to offer software that builds trust in blockchains.

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