Blockchain analytics should be used by virtual asset service providers (VASPs) operating in New York, according to the New York State Department of Financial Services (NYDFS). NYDFS mandates that VASPs adopt blockchain analytics. All virtual asset service providers should use blockchain analytics, according to a letter from the New York Department of Financial Services (NYDFS).
To guarantee that virtual currency is not utilised for illegal reasons, these analytics techniques would be deployed. There is nothing on the transfer’s face that attempts to identify the sender or recipient, or even the underlying beneficial owners. Wallet addresses are normally pseudonymous.
The New York Department of Financial Services (NYDFS) urged virtual currency service providers to use blockchain analytics to prevent money laundering and terrorism funding, among other unlawful actions.
NYDFS also highlighted three analytical procedures that can be utilised to stop the criminal usage of cryptocurrency. KYC, monitoring on-chain operations, and screening on-chain activity for sanctions are all part of these procedures.
The regulatory framework for cryptocurrencies has undergone significant change in the state of New York. Proof-of-work Bitcoin mining has been outlawed in New York since last week, according to legislation enacted by the state assembly. Crypto mining operations reliant on a proof-of-work consensus will be prohibited for two years as a result of the prohibition.
The cryptocurrency exchange Coinbase has announced the debut of a KYT service called “Coinbase Intelligence,” which stands for “Know Your Transaction.” The purpose of this service is to ensure that bitcoin firms are adhering to the established rules.
Businesses and institutions may reduce regulatory risks associated with using Coinbase’s platform by utilising the new API service, according to a statement made by Coinbase. Automated monitoring for millions of transactions is one of the benefits of this new service, which generates risk scores for different wallet addresses. Despite changes in risk profiles, the service will provide notifications that enable proactive risk management.
Rule engines and third-party case management tools will be configured by Coinbase Intelligence as well. Additionally, any transactions linked to terrorism financing or money laundering will be scrutinised. It has been renamed Coinbase Tracer to track the movement of funds using public attribution data to reduce the risk of fraud, battle any risk, and detect the danger linked to money laundering.