To avoid and control fraudulent activities on crypto world companies are joining hands with other organizations. Many such partnerships have been seen till date. The same partnership agreement has been held between Binance (a famous exchange) and Chainalysis.
However, they announced their collaboration during a press release on October 17, 2018. The main motive behind this partnership is to develop more enhanced ways of uncovering fraudulent activities and doubtful transactions.
With the cross-border expansion, Binance has the largest trade volume comparing to other exchanges of the world. The high trade volume requires proper laws and regulations to be controlled easily. To fulfill this requirement, Binance is focusing on AML and KYC rules and regulations.
Thus, Binance offered the partnership to Chainalysis to monitor the anti-money laundering and know your customer rules. Chainalysis is responsible for controlling and keeping the track of all the transactions that come on Binance exchange.
It released the solution in April 2018 and named it KYT. With this Know your Transaction program, Binance easily tracks all of its transactions.
Furthermore, COO of Chainalysis commented in a press release that in this era almost all the exchanges have to face strict legislative rules enforced by regulatory bodies. Thus, to make them trustworthy, companies have to follow the footstep of Binance and should plan to develop new compliance programs to control money laundering.
This partnership was necessary for the Binance in order to further expansion as without fulfilling the rules imposed by regulatory bodies it cannot deliver the best setup for cross-border trading.